99–006 

112TH CONGRESS REPT. 112–90 " ! HOUSE OF REPRESENTATIVES 1st Session Part 1 

CREATING JOBS THROUGH SMALL BUSINESS 

INNOVATION ACT OF 2011 

MAY 26, 2011.—Ordered to be printed 

Mr. HALL, from the Committee on Science, Space, and Technology, 

submitted the following 

R E P O R T 

together with 

ADDITIONAL VIEWS 

[To accompany H.R. 1425] 

[Including cost estimate of the Congressional Budget Office] 

The Committee on Science, Space, and Technology, to whom was 

referred the bill (H.R. 1425) to reauthorize and improve the SBIR 

and STTR programs, and for other purposes, having considered the 

same, report favorably thereon with an amendment and recommend that the bill as amended do pass. 

CONTENTS 

Page 

I. Amendment ................................................................................................. 2 

II. Purpose and Summary ............................................................................... 23 

III. Background and Need for the Legislation ................................................ 23 

IV. Hearing Summary ....................................................................................... 24 

V. Committee Consideration ........................................................................... 24 

VI. Committee Votes ......................................................................................... 25 

VII. Summary of Major Provisions of the Bill .................................................. 38 

VIII. Committee Views ........................................................................................ 41 

IX. Committee Oversight Findings .................................................................. 44 

X. Statement on General Performance Goals and Objectives ...................... 44 

XI. New Budget Authority, Entitlement Authority, and Tax Expenditures 44 

XII. Advisory on Earmarks ................................................................................ 44 

XIII. Committee Cost Estimate ........................................................................... 44 

XIV. Congressional Budget Office Cost Estimate ............................................. 44 

XV. Federal Mandates Statement ..................................................................... 47 

XVI. Federal Advisory Committee Statement ................................................... 47 

XVII. Applicability to Legislative Branch ........................................................... 47 

XVIII. Section-by-Section Analysis of the Legislation ......................................... 48 


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XIX. Changes in Existing Law Made by the Bill, As Reported ....................... 55 

XX. Additional Views ......................................................................................... 85 

XXI. Proceedings of the Subcommittee Markup ................................................ 87 

XXII. Proceedings of the Full Committee Markup ............................................. 209 

I. AMENDMENT

The amendment is as follows: 

Strike all after the enacting clause and insert the following: 

SECTION 1. SHORT TITLE. 

This Act may be cited as the ‘‘Creating Jobs Through Small Business Innovation 

Act of 2011’’. 

SEC. 2. TABLE OF CONTENTS. 

The table of contents for this Act is as follows: 

Sec. 1. Short title. 

Sec. 2. Table of contents. 

Sec. 3. Definitions. 

TITLE I—REAUTHORIZATION OF THE SBIR AND STTR PROGRAMS 

Sec. 101. Extension of termination dates. 

Sec. 102. SBIR and STTR award levels. 

Sec. 103. Agency and program flexibility. 

Sec. 104. Elimination of Phase II invitations. 

Sec. 105. Phase flexibility. 

Sec. 106. Participation by firms with substantial investment from multiple venture capital operating companies, hedge funds, or private equity firms in a portion of the SBIR program. 

Sec. 107. Ensuring that innovative small businesses with substantial investment from venture capital operating 

companies, hedge funds, or private equity firms are able to participate in the SBIR and STTR programs. Sec. 108. SBIR and STTR special acquisition preference. 

Sec. 109. Collaborating with Federal laboratories and research and development centers. 

Sec. 110. Notice requirement. 

Sec. 111. Additional SBIR and STTR Awards. 

TITLE II—OUTREACH AND COMMERCIALIZATION INITIATIVES 

Sec. 201. Technical assistance for awardees. 

Sec. 202. Commercialization Readiness Program at Department of Defense. 

Sec. 203. Commercialization Readiness Pilot Program for civilian agencies. 

Sec. 204. Interagency Policy Committee. 

Sec. 205. Clarifying the definition of ‘‘Phase III’’. 

Sec. 206. Shortened period for final decisions on proposals and applications. 

Sec. 207. Phase 0 Proof of Concept Partnership pilot program. 

TITLE III—OVERSIGHT AND EVALUATION 

Sec. 301. Streamlining annual evaluation requirements. 

Sec. 302. Data collection from agencies for SBIR. 

Sec. 303. Data collection from agencies for STTR. 

Sec. 304. Public database. 

Sec. 305. Government database. 

Sec. 306. Accuracy in funding base calculations. 

Sec. 307. Continued evaluation by the National Academy of Sciences. 

Sec. 308. Technology insertion reporting requirements. 

Sec. 309. Obtaining consent from SBIR and STTR applicants to release contact information to economic development organizations. 

Sec. 310. Pilot to allow funding for administrative, oversight, and contract processing costs. 

Sec. 311. GAO study with respect to venture capital operating company, hedge fund, and private equity firm 

involvement. 

Sec. 312. Reducing vulnerability of SBIR and STTR programs to fraud, waste, and abuse. 

Sec. 313. Simplified paperwork requirements. 

Sec. 314. Reducing fraud, waste, and abuse. 

TITLE IV—POLICY DIRECTIVES 

Sec. 401. Conforming amendments to the SBIR and the STTR Policy Directives. 

TITLE V—OTHER PROVISIONS 

Sec. 501. Report on SBIR and STTR program goals. 

Sec. 502. Competitive selection procedures for SBIR and STTR programs. 

Sec. 503. Loan restrictions. 

Sec. 504. Program diversification. 

SEC. 3. DEFINITIONS. 

In this Act— 

(1) the terms ‘‘Administration’’ and ‘‘Administrator’’ mean the Small Business 

Administration and the Administrator thereof, respectively; 

(2) the terms ‘‘extramural budget’’, ‘‘Federal agency’’, ‘‘Small Business Innovation Research Program’’, ‘‘SBIR’’, ‘‘Small Business Technology Transfer Program’’, and ‘‘STTR’’ have the meanings given such terms in section 9 of the 

Small Business Act (15 U.S.C. 638); and 


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(3) the term ‘‘small business concern’’ has the meaning given that term under 

section 3 of the Small Business Act (15 U.S.C. 632). 

TITLE I—REAUTHORIZATION OF THE SBIR 

AND STTR PROGRAMS 

SEC. 101. EXTENSION OF TERMINATION DATES. 

(a) SBIR.—Section 9(m) of the Small Business Act (15 U.S.C. 638(m)) is amended— 

(1) by striking ‘‘TERMINATION.—’’ and all that follows through ‘‘the authorization’’ and inserting ‘‘TERMINATION.—The authorization’’; 

(2) by striking ‘‘2008’’ and inserting ‘‘2014’’; and 

(3) by striking paragraph (2). 

(b) STTR.—Section 9(n)(1)(A) of the Small Business Act (15 U.S.C. 638(n)(1)(A)) 

is amended— 

(1) by striking ‘‘IN GENERAL.—’’ and all that follows through ‘‘with respect’’ 

and inserting ‘‘IN GENERAL.—With respect’’; 

(2) by striking ‘‘2009’’ and inserting ‘‘2014’’; and 

(3) by striking clause (ii). 

SEC. 102. SBIR AND STTR AWARD LEVELS. 

(a) SBIR ADJUSTMENTS.—Section 9(j)(2)(D) of the Small Business Act (15 U.S.C. 

638(j)(2)(D)) is amended— (1) by striking ‘‘$100,000’’ and inserting ‘‘$150,000’’; and 

(2) by striking ‘‘$750,000’’ and inserting ‘‘$1,000,000’’. 

(b) STTR ADJUSTMENTS.—Section 9(p)(2)(B)(ix) of the Small Business Act (15 

U.S.C. 638(p)(2)(B)(ix)) is amended— (1) by striking ‘‘$100,000’’ and inserting ‘‘$150,000’’; and 

(2) by striking ‘‘$750,000’’ and inserting ‘‘$1,000,000’’. 

(c) ANNUAL ADJUSTMENTS.—Section 9 of the Small Business Act (15 U.S.C. 638) 

is amended— 

(1) in subsection (j)(2)(D), by striking ‘‘once every 5 years to reflect economic 

adjustments and programmatic considerations’’ and inserting ‘‘every year for inflation’’; and 

(2) in subsection (p)(2)(B)(ix), as amended by subsection (b) of this section, by 

inserting ‘‘(each of which the Administrator shall adjust for inflation annually)’’ 

after ‘‘$1,000,000,’’. 

(d) LIMITATION ON SIZE OF AWARDS.—Section 9 of the Small Business Act (15 

U.S.C. 638), as amended by this Act, is further amended by adding at the end the 

following: 

‘‘(aa) LIMITATION ON SIZE OF AWARDS.— ‘‘(1) LIMITATION.—No Federal agency may issue an award under the SBIR 

program or the STTR program if the size of the award exceeds the award guidelines established under this section by more than 50 percent. 

‘‘(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 award amount; 

‘‘(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.—The Administrator shall include the information described in 

paragraph (2) in the annual report of the Administrator to Congress. 

‘‘(4) RULE OF CONSTRUCTION.—Nothing in this subsection shall be construed 

to prevent a Federal agency from supplementing an award under the SBIR program or the STTR program using funds of the Federal agency that are not part 

of the SBIR program or the STTR program of the Federal agency.’’. 

SEC. 103. AGENCY AND PROGRAM FLEXIBILITY. 

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is 

further amended by adding at the end the following: 

‘‘(bb) SUBSEQUENT PHASE II AWARDS.— 

‘‘(1) AGENCY FLEXIBILITY.—A small business concern that received a Phase I 

award from a Federal agency under this section shall be eligible to receive a 

subsequent Phase II award from another Federal agency, if the head of each 


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relevant Federal agency or the relevant component of the Federal agency makes 

a written determination that the topics of the relevant awards are the same and 

both agencies report the awards to the Administrator for inclusion in the public 

database under subsection (k). 

‘‘(2) SBIR AND STTR PROGRAM FLEXIBILITY.—A small business concern that received a Phase I award under this section under the SBIR program or the STTR 

program may receive a subsequent Phase II award in either the SBIR program 

or the STTR program and the participating agency or agencies shall report the 

awards to the Administrator for inclusion in the public database under subsection (k).’’. 

SEC. 104. ELIMINATION OF PHASE II INVITATIONS. 

Section 9(e) of the Small Business Act (15 U.S.C. 638(e)) is amended— 

(1) in paragraph (4)(B), by striking ‘‘to further’’ and inserting ‘‘which shall not 

include any invitation, pre-screening, pre-selection, or down-selection process for 

eligibility for Phase II, that will further’’; and 

(2) in paragraph (6)(B), by striking ‘‘to further develop proposed ideas to’’ and 

inserting ‘‘which shall not include any invitation, pre-screening, pre-selection, or 

down-selection process for eligibility for Phase II, that will further develop proposals that’’. 

SEC. 105. PHASE FLEXIBILITY. 

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is 

further amended by adding at the end the following: 

‘‘(cc) PHASE I REQUIRED.—Under this section, a Federal agency shall provide to 

a small business concern an award under Phase II of an SBIR program with respect 

to a project only if such agency finds that the small business concern has been provided an award under Phase I of an SBIR program with respect to such project or 

has completed the determinations described in subsection (e)(4)(A) with respect to 

such project despite not having been provided a Phase I award.’’. 

SEC. 106. PARTICIPATION BY FIRMS WITH SUBSTANTIAL INVESTMENT FROM MULTIPLE VENTURE CAPITAL OPERATING COMPANIES, HEDGE FUNDS, OR PRIVATE EQUITY 

FIRMS IN A PORTION OF THE SBIR PROGRAM. 

(a) IN GENERAL.—Section 9 of the Small Business Act (15 U.S.C. 638), as amended 

by this Act, is further amended by adding at the end the following: 

‘‘(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 a written determination described in paragraph (2) 

provided 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 an award is made— 

‘‘(A) the Director of the National Institutes of Health, the Secretary of Energy, the Administrator of the National Aeronautics and Space Administration, and the Director of the National Science Foundation may award not 

more than 45 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; 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 35 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 the SBIR project. 

‘‘(3) REGISTRATION.—A small business concern that is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms 


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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.—The head of a Federal agency that makes an award 

under this subsection during a fiscal year shall collect and submit to the 

Administrator data relating to the number and dollar amount of Phase I 

awards, Phase II awards, and any other category of awards by the Federal 

agency under the SBIR program during that fiscal year. 

‘‘(B) ANNUAL REPORTING.—The Administrator shall include as part of 

each annual report by the Administration under subsection (b)(7) any data 

submitted under subparagraph (A) and a discussion of the compliance of 

each Federal agency that makes an award under this subsection during the 

fiscal year with the maximum percentages under paragraph (1). 

‘‘(5) ENFORCEMENT.—If a Federal agency awards more than the percent of the 

funds allocated for the SBIR program of the Federal agency authorized under 

paragraph (1) for a purpose described in paragraph (1), the head of the Federal 

agency shall transfer an amount equal to the amount awarded in excess of the 

amount authorized under paragraph (1) 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 180 days after the date on which the Federal agency 

made the award that caused the total awarded under paragraph (1) to be more 

than the amount authorized under paragraph (1) for a purpose described in 

paragraph (1). 

‘‘(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 majorityowned 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.—A Federal agency may not use investment of venture capital or investment from hedge funds or private equity firms as a criterion for the award of contracts under the SBIR program or STTR program.’’. 

(b) TECHNICAL AND CONFORMING AMENDMENT.—Section 3 of the Small Business 

Act (15 U.S.C. 632) is amended by adding at the end the following: 

‘‘(aa) VENTURE CAPITAL OPERATING COMPANY.—In this Act, the term ‘venture capital operating company’ means an entity described in clause (i), (v), or (vi) of section 

121.103(b)(5) of title 13, Code of Federal Regulations (or any successor thereto). 

‘‘(bb) HEDGE FUND.—In this Act, the term ‘hedge fund’ has the meaning given 

that term in section 13(h)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 

1851(h)(2)). 

‘‘(cc) PRIVATE EQUITY FIRM.—In this Act, the term ‘private equity firm’ has the 

meaning given the term ‘private equity fund’ in section 13(h)(2) of the Bank Holding 

Company Act of 1956 (12 U.S.C. 1851(h)(2)).’’. 


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SEC. 107. ENSURING THAT INNOVATIVE SMALL BUSINESSES WITH SUBSTANTIAL INVESTMENT 

FROM VENTURE CAPITAL OPERATING COMPANIES, HEDGE FUNDS, OR PRIVATE 

EQUITY FIRMS ARE ABLE TO PARTICIPATE IN THE SBIR AND STTR PROGRAMS. 

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is 

further amended by adding at the end the following: 

‘‘(ee) VENTURE CAPITAL OPERATING COMPANIES, HEDGE FUNDS, AND PRIVATE EQUITY FIRMS.—Effective only for the SBIR and STTR programs the following shall 

apply: 

‘‘(1) A business concern that has more than 500 employees shall not qualify 

as a small business concern. 

‘‘(2) In determining whether a small business concern is independently owned 

and operated under section 3(a)(1) or meets the small business size standards 

instituted under section 3(a)(2), the Administrator shall not consider a business 

concern to be affiliated with a venture capital operating company, hedge fund, 

or private equity firm (or with any other business that the venture capital operating company, hedge fund, or private equity firm has financed) if— 

‘‘(A) the venture capital operating company, hedge fund, or private equity 

firm does not own 50 percent or more of the business concern; and 

‘‘(B) employees of the venture capital operating company, hedge fund, or 

private equity firm do not constitute a majority of the board of directors of 

the business concern. 

‘‘(3) A business concern shall be deemed to be ‘independently owned and operated’ if— 

‘‘(A) it is owned in majority part by one or more natural persons or venture capital operating companies, hedge funds, or private equity firms; 

‘‘(B) there is no single venture capital operating company, hedge fund, or 

private equity firm that owns 50 percent or more of the business concern; 

and 

‘‘(C) there is no single venture capital operating company, hedge fund, or 

private equity firm the employees of which constitute a majority of the 

board of directors of the business concern. 

‘‘(4) If a venture capital operating company, hedge fund, or private equity firm 

controlled by a business with more than 500 employees (in this paragraph referred to as a ‘VCOC, hedge fund, or private equity firm under large business 

control’) has an ownership interest in a small business concern that is owned 

in majority part by venture capital operating companies, hedge funds, or private 

equity firms, the small business concern is eligible to receive an award under 

the SBIR or STTR program only if— 

‘‘(A) not more than two VCOCs, hedge funds, or private equity firms 

under large business control have an ownership interest in the small business concern; and 

‘‘(B) the VCOCs, hedge funds, or private equity firms under large business control do not collectively own more than 20 percent of the small business concern.’’. 

SEC. 108. SBIR AND STTR SPECIAL ACQUISITION PREFERENCE. 

Section 9(r) of the Small Business Act (15 U.S.C. 638(r)) is amended by adding 

at the end the following: 

‘‘(4) PHASE III AWARDS.—To the greatest extent practicable, Federal agencies 

and Federal prime contractors shall issue Phase III awards relating to technology, including sole source awards, to the SBIR and STTR award recipients 

that developed the technology.’’. 

SEC. 109. COLLABORATING WITH FEDERAL LABORATORIES AND RESEARCH AND DEVELOPMENT CENTERS. 

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is 

further amended by adding at the end the following: 

‘‘(ff) 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 12(d) of the Stevenson-Wydler Technology Innovation 

Act of 1980 (15 U.S.C. 3710a(d))) with a Federal laboratory. 

‘‘(2) PROHIBITION.—No Federal agency shall— 


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‘‘(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 a 

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 the date of enactment 

of this subsection, 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 

and 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.—If a small business concern receiving an award 

under this section enters 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, the Federal laboratory or federally funded research and development center may not require advance payment from the 

small business concern in an amount greater than the amount necessary to pay 

for 30 days of such activities.’’. 

SEC. 110. NOTICE REQUIREMENT. 

(a) SBIR PROGRAM.—Section 9(g) of the Small Business Act (15 U.S.C. 638(g)) is 

amended— 

(1) in paragraph (10), by striking ‘‘and’’ at the end; 

(2) in paragraph (11), by striking the period at the end and inserting ‘‘; and’’; 

and 

(3) by adding at the end the following: 

‘‘(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.’’. 

(b) STTR PROGRAM.—Section 9(o) of the Small Business Act (15 U.S.C. 638(o)) is 

amended— 

(1) by striking paragraph (15); 

(2) in paragraph (16), by striking the period at the end and inserting ‘‘; and’’; 

(3) by redesignating paragraph (16) as paragraph (15); and 

(4) by adding at the end the following: 

‘‘(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.’’. 

SEC. 111. ADDITIONAL SBIR AND STTR AWARDS. 

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is 

further amended by adding at the end the following: 

‘‘(gg) ADDITIONAL SBIR AND STTR AWARDS.— 

‘‘(1) EXPRESS AUTHORITY FOR AWARDING A SEQUENTIAL PHASE II AWARD.—A 

small business concern that receives a Phase II SBIR award or a Phase II STTR 

award for a project remains eligible to receive one additional Phase II SBIR 

award or Phase II STTR award for continued work on that project. 

‘‘(2) PREVENTING DUPLICATIVE AWARDS.—The head of a Federal agency shall 

verify that any activity to be performed with respect to a project with a Phase 

I or Phase II SBIR or STTR award has not been funded under the SBIR program or STTR program of another Federal agency.’’. 

TITLE II—OUTREACH AND 

COMMERCIALIZATION INITIATIVES 

SEC. 201. TECHNICAL ASSISTANCE FOR AWARDEES. 

Section 9(q) of the Small Business Act (15 U.S.C. 638(q)) is amended— 


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(1) in paragraph (1)— 

(A) by inserting ‘‘or STTR program’’ after ‘‘SBIR program’’; and 

(B) by striking ‘‘SBIR projects’’ and inserting ‘‘SBIR or STTR projects’’; 

(2) in paragraph (2), by striking ‘‘3 years’’ and inserting ‘‘5 years’’; and 

(3) in paragraph (3)— 

(A) in subparagraph (A)— 

(i) by inserting ‘‘or STTR’’ after ‘‘SBIR’’; and 

(ii) by striking ‘‘$4,000’’ and inserting ‘‘$5,000’’; 

(B) by striking subparagraph (B) and inserting the following: 

‘‘(B) PHASE II.—A Federal agency described in paragraph (1) may— 

‘‘(i) provide to the recipient of a Phase II SBIR or STTR award, 

through a vendor selected under paragraph (2), the services described 

in paragraph (1), in an amount equal to not more than $5,000 per year; 

or 

‘‘(ii) authorize the recipient of a Phase II SBIR or STTR award to 

purchase the services described in paragraph (1), in an amount equal 

to not more than $5,000 per year, which shall be in addition to the 

amount of the recipient’s award.’’; and 

(C) by adding at the end the following: 

‘‘(C) FLEXIBILITY.—In carrying out subparagraphs (A) and (B), each Federal agency shall provide the allowable amounts to a recipient that meets 

the eligibility requirements under the applicable subparagraph, if the recipient requests to seek technical assistance from an individual or entity 

other than the vendor selected under paragraph (2) by the Federal agency. 

‘‘(D) LIMITATION.—A Federal agency may not— 

‘‘(i) use the amounts authorized under subparagraph (A) or (B) unless 

the vendor selected under paragraph (2) provides the technical assistance to the recipient; or 

‘‘(ii) enter a contract with a vendor under paragraph (2) under which 

the amount provided for technical assistance is based on total number 

of Phase I or Phase II awards.’’. 

SEC. 202. COMMERCIALIZATION READINESS PROGRAM AT DEPARTMENT OF DEFENSE. 

(a) IN GENERAL.—Section 9(y) of the Small Business Act (15 U.S.C. 638(y)) is 

amended— 

(1) in the subsection heading, by striking ‘‘PILOT’’ and inserting ‘‘READINESS’’; 

(2) by striking ‘‘Pilot’’ each place that term appears and inserting ‘‘Readiness’’; 

(3) in paragraph (1)— 

(A) by inserting ‘‘or Small Business Technology Transfer Program’’ after 

‘‘Small Business Innovation Research Program’’; and 

(B) by adding at the end the following: ‘‘The authority to create and administer a Commercialization Readiness Program under this subsection 

may not be construed to eliminate or replace any other SBIR program or 

STTR program that enhances the insertion or transition of SBIR or STTR 

technologies, including any such program in effect on the date of enactment 

of the National Defense Authorization Act for Fiscal Year 2006 (Public Law 

109–163; 119 Stat. 3136).’’; 

(4) in paragraph (2), by inserting ‘‘or Small Business Technology Transfer 

Program’’ after ‘‘Small Business Innovation Research Program’’; 

(5) by striking paragraphs (5) and (6); and 

(6) by inserting after paragraph (4) the following: 

‘‘(5) 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. 

‘‘(6) 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 that Secretary that 

lead to technology transition into programs of record or fielded systems; 

‘‘(B) use incentives in effect on the date of enactment of the Creating Jobs 

Through Small Business Innovation Act of 2011, or create new incentives, 

to encourage agency program managers and prime contractors to meet the 

goal under subparagraph (A); and 

‘‘(C) include in the annual report to Congress the percentage of contracts 

described in subparagraph (A) awarded by that Secretary, and information 


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on the ongoing status of projects funded through the Commercialization 

Readiness Program and efforts to transition these technologies into programs of record or fielded systems.’’. 

(b) TECHNICAL AND CONFORMING AMENDMENT.—Section 9(i)(1) of the Small Business Act (15 U.S.C. 638(i)(1)) is amended by inserting ‘‘(including awards under subsection (y))’’ after ‘‘the number of awards’’. 

SEC. 203. COMMERCIALIZATION READINESS PILOT PROGRAM FOR CIVILIAN AGENCIES. 

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is 

further amended by adding at the end the following: 

‘‘(hh) 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.—A covered Federal agency may not establish a pilot 

program unless the covered Federal agency makes a written application to 

the Administrator, not later than 90 days before the first day of the fiscal 

year in which the pilot program is to be established, that describes a compelling reason that additional investment in SBIR or STTR technologies is 

necessary, including unusually high regulatory, systems integration, or 

other costs relating to development or manufacturing of identifiable, highly 

promising small business technologies or a class of such technologies expected to substantially advance the mission of the agency. 

‘‘(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.—The head of a covered Federal agency 

may not make an award under a pilot program in excess of 3 times the dollar 

amounts generally established for Phase II awards under subsection (j)(2)(D) or 

(p)(2)(B)(ix). 

‘‘(4) REGISTRATION.—Any applicant that receives an award under a pilot program shall register with the Administrator in a registry that is available to the 

public. 

‘‘(5) AWARD CRITERIA OR CONSIDERATION.—When making an award under this 

section, the head of a covered Federal agency shall give consideration to whether the technology to be supported by the award is likely to be manufactured in 

the United States. 

‘‘(6) REPORT.—The head of each covered Federal agency shall include in the 

annual report of the covered Federal agency to the Administrator an analysis 

of the various activities considered for inclusion in the pilot program of the covered Federal agency and a statement of the reasons why each activity considered was included or not included, as the case may be. 

‘‘(7) TERMINATION.—The authority to establish a pilot program under this section expires at the end of fiscal year 2014. 

‘‘(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 the program established under paragraph (1).’’. 

SEC. 204. INTERAGENCY POLICY COMMITTEE. 

(a) ESTABLISHMENT.—The Director of the Office of Science and Technology Policy 

shall establish an Interagency SBIR/STTR Policy Committee. 

(b) DUTIES.—The Interagency SBIR/STTR Policy Committee shall review the following issues and make policy recommendations on ways to improve program effectiveness and efficiency: 


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(1) The public and government databases described in section 9(k) of the 

Small Business Act (15 U.S.C. 638(k)). 

(2) Federal agency flexibility in establishing Phase I and II award sizes, including appropriate criteria for exercising such flexibility. 

(3) Commercialization assistance best practices of Federal agencies with significant potential to be employed by other agencies, and the appropriate steps 

to achieve that leverage, as well as proposals for new initiatives to address 

funding gaps that business concerns face after Phase II but before commercialization. 

(4) Developing and incorporating a standard evaluation framework to enable 

systematic assessment of SBIR and STTR, including through improved tracking 

of awards and outcomes and development of performance measures for the 

SBIR program and STTR program of each Federal agency. 

(c) REPORTS.—The Interagency SBIR/STTR Policy Committee shall transmit to 

the Committee on Science, Space, and Technology and the Committee on Small 

Business of the House of Representatives and to the Committee on Small Business 

and Entrepreneurship of the Senate— 

(1) a report on its review and recommendations under subsection (b)(1) not 

later than 1 year after the date of enactment of this Act; 

(2) a report on its review and recommendations under subsection (b)(2) not 

later than 18 months after the date of enactment of this Act; 

(3) a report on its review and recommendations under subsection (b)(3) not 

later than 2 years after the date of enactment of this Act; and 

(4) a report on its review and recommendations under subsection (b)(4) not 

later than 2 years after the date of enactment of this Act. 

SEC. 205. CLARIFYING THE DEFINITION OF ‘‘PHASE III’’. 

(a) PHASE III AWARDS.—Section 9(e) of the Small Business Act (15 U.S.C. 638(e)), 

as amended by this Act, is further amended— 

(1) in paragraph (4)(C), in the matter preceding clause (i), by inserting ‘‘for 

work that derives from, extends, or completes efforts made under prior funding 

agreements under the SBIR program’’ after ‘‘phase’’; 

(2) in paragraph (6)(C), in the matter preceding clause (i), by inserting ‘‘for 

work that derives from, extends, or completes efforts made under prior funding 

agreements under the STTR program’’ after ‘‘phase’’; 

(3) in paragraph (8), by striking ‘‘and’’ at the end; 

(4) in paragraph (9), by striking the period at the end and inserting a semicolon; and 

(5) by adding at the end the following: 

‘‘(10) the term ‘commercialization’ means— 

‘‘(A) the process of developing products, processes, technologies, or services; and 

‘‘(B) the production and delivery of products, processes, technologies, or 

services for sale (whether by the originating party or by others) to or use 

by the Federal Government or commercial markets;’’. 

(b) TECHNICAL AND CONFORMING AMENDMENTS.—Section 9 of the Small Business 

Act (15 U.S.C. 638), as amended by this Act, is further amended— 

(1) in subsection (e)— 

(A) in paragraph (4)(C)(ii), by striking ‘‘scientific review criteria’’ and inserting ‘‘merit-based selection procedures’’; 

(B) in paragraph (9), by striking ‘‘the second or the third phase’’ and inserting ‘‘Phase II or Phase III’’; and 

(C) by adding at the end the following: 

‘‘(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); and 

‘‘(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).’’; 

(2) in subsection (j)— 


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(A) in paragraph (1)(B), by striking ‘‘phase two’’ and inserting ‘‘Phase II’’; 

(B) in paragraph (2)— 

(i) in subparagraph (B)— 

(I) by striking ‘‘the third phase’’ each place it appears and inserting ‘‘Phase III’’; and 

(II) by striking ‘‘the second phase’’ and inserting ‘‘Phase II’’; 

(ii) in subparagraph (D)— 

(I) by striking ‘‘the first phase’’ and inserting ‘‘Phase I’’; and 

(II) by striking ‘‘the second phase’’ and inserting ‘‘Phase II’’; 

(iii) in subparagraph (F), by striking ‘‘the third phase’’ and inserting 

‘‘Phase III’’; 

(iv) in subparagraph (G)— 

(I) by striking ‘‘the first phase’’ and inserting ‘‘Phase I’’; and 

(II) by striking ‘‘the second phase’’ and inserting ‘‘Phase II’’; and 

(v) in subparagraph (H)— 

(I) by striking ‘‘the first phase’’ and inserting ‘‘Phase I’’; 

(II) by striking ‘‘second phase’’ each place it appears and inserting ‘‘Phase II’’; and 

(III) by striking ‘‘third phase’’ and inserting ‘‘Phase III’’; and 

(C) in paragraph (3)— 

(i) in subparagraph (A)— 

(I) by striking ‘‘the first phase (as described in subsection 

(e)(4)(A))’’ and inserting ‘‘Phase I’’; 

(II) by striking ‘‘the second phase (as described in subsection 

(e)(4)(B))’’ and inserting ‘‘Phase II’’; and 

(III) by striking ‘‘the third phase (as described in subsection 

(e)(4)(C))’’ and inserting ‘‘Phase III’’; and 

(ii) in subparagraph (B), by striking ‘‘second phase’’ and inserting 

‘‘Phase II’’; 

(3) in subsection (k)— 

(A) by striking ‘‘first phase’’ each place it appears and inserting ‘‘Phase 

I’’; and 

(B) by striking ‘‘second phase’’ each place it appears and inserting ‘‘Phase 

II’’; 

(4) in subsection (l)(2)— 

(A) by striking ‘‘the first phase’’ and inserting ‘‘Phase I’’; and 

(B) by striking ‘‘the second phase’’ and inserting ‘‘Phase II’’; 

(5) in subsection (o)(13)— 

(A) in subparagraph (B), by striking ‘‘second phase’’ and inserting ‘‘Phase 

II’’; and 

(B) in subparagraph (C), by striking ‘‘third phase’’ and inserting ‘‘Phase 

III’’; 

(6) in subsection (p)— 

(A) in paragraph (2)(B)— 

(i) in clause (vi)— 

(I) by striking ‘‘the second phase’’ and inserting ‘‘Phase II’’; and 

(II) by striking ‘‘the third phase’’ and inserting ‘‘Phase III’’; and 

(ii) in clause (ix)— 

(I) by striking ‘‘the first phase’’ and inserting ‘‘Phase I’’; and 

(II) by striking ‘‘the second phase’’ and inserting ‘‘Phase II’’; and 

(B) in paragraph (3)— 

(i) by striking ‘‘the first phase (as described in subsection (e)(6)(A))’’ 

and inserting ‘‘Phase I’’; 

(ii) by striking ‘‘the second phase (as described in subsection 

(e)(6)(B))’’ and inserting ‘‘Phase II’’; and 

(iii) by striking ‘‘the third phase (as described in subsection (e)(6)(C))’’ 

and inserting ‘‘Phase III’’; 

(7) in subsection (q)(3)(A)— 

(A) in the subparagraph heading, by striking ‘‘FIRST PHASE’’ and inserting 

‘‘PHASE I’’; and 

(B) by striking ‘‘first phase’’ and inserting ‘‘Phase I’’; 

(8) in subsection (r)— 

(A) in the subsection heading, by striking ‘‘THIRD PHASE’’ and inserting 

‘‘PHASE III’’; 

(B) in paragraph (1)— 

(i) in the first sentence— 

(I) by striking ‘‘for the second phase’’ and inserting ‘‘for Phase II’’; 

(II) by striking ‘‘third phase’’ and inserting ‘‘Phase III’’; and 


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(III) by striking ‘‘second phase period’’ and inserting ‘‘Phase II 

period’’; and 

(ii) in the second sentence— 

(I) by striking ‘‘second phase’’ and inserting ‘‘Phase II’’; and 

(II) by striking ‘‘third phase’’ and inserting ‘‘Phase III’’; and 

(C) in paragraph (2), by striking ‘‘third phase’’ and inserting ‘‘Phase III’’; 

and 

(9) in subsection (u)(2)(B), by striking ‘‘the first phase’’ and inserting ‘‘Phase 

I’’. 

SEC. 206. SHORTENED PERIOD FOR FINAL DECISIONS ON PROPOSALS AND APPLICATIONS. 

(a) IN GENERAL.—Section 9 of the Small Business Act (15 U.S.C. 638), as amended 

by this Act, is further amended— 

(1) in subsection (g)(4)— 

(A) by inserting ‘‘(A)’’ after ‘‘(4)’’; 

(B) by adding ‘‘and’’ after the semicolon at the end; and 

(C) by adding at the end the following: 

‘‘(B) make a final decision on each proposal submitted under the SBIR program— 

‘‘(i) not later than 90 days after the date on which the solicitation closes; or ‘‘(ii) if the Administrator authorizes an extension for a solicitation, not 

later than 180 days after the date on which the solicitation closes;’’; and 

(2) in subsection (o)(4)— 

(A) by inserting ‘‘(A)’’ after ‘‘(4)’’; 

(B) by adding ‘‘and’’ after the semicolon at the end; and 

(C) by adding at the end the following: 

‘‘(B) make a final decision on each proposal submitted under the STTR program— 

‘‘(i) not later than 90 days after the date on which the solicitation closes; or ‘‘(ii) if the Administrator authorizes an extension for a solicitation, not 

later than 180 days after the date on which the solicitation closes;’’. 

(b) NIH PEER REVIEW PROCESS.—Section 9 of the Small Business Act (15 U.S.C. 

638), as amended by this Act, is further amended by adding at the end the following: 

‘‘(ii) NIH PEER REVIEW PROCESS.—Notwithstanding subsections (g)(4)(B) and 

(o)(4)(B), the Director of the National Institutes of Health may make an award 

under the SBIR program or the STTR program of the National Institutes of Health 

only if the application for the award has undergone technical and scientific peer review under section 492 of the Public Health Service Act (42 U.S.C. 289a). 

‘‘(jj) NSF PEER REVIEW PROCESS.—Notwithstanding subsections (g)(4)(B) and 

(o)(4)(B), the Director of the National Science Foundation may make an award 

under the SBIR program or the STTR program of the National Science Foundation 

only if the application for the award has undergone the National Science Foundation’s technical and scientific peer review process and met all other applicable peer 

review procedures and guidelines pursuant to the National Science Foundation Act 

of 1950 (42 U.S.C. 1861, et seq.) and other applicable Federal law.’’. 

SEC. 207. PHASE 0 PROOF OF CONCEPT PARTNERSHIP PILOT PROGRAM. 

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is 

further amended by adding at the end the following: 

‘‘(kk) PHASE 0 PROOF OF CONCEPT PARTNERSHIP PILOT PROGRAM.— 

‘‘(1) IN GENERAL.—The Director of the National Institutes of Health shall use 

$10,000,000 of the funds allocated under subsection (n)(1) for a Proof of Concept 

Partnership pilot program to accelerate the creation of small businesses and the 

commercialization of research innovations from qualifying institutions. To implement this program, the Director shall award, through a competitive, meritbased process, grants to qualifying institutions. These grants shall only be used 

to administer Proof of Concept Partnership awards in conformity with this subsection. 

‘‘(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.— 


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‘‘(A) IN GENERAL.—A Proof of Concept Partnership shall be set up by a 

qualifying institution to award grants to individual researchers. These 

grants should provide researchers with the initial investment and the resources to support the proof of concept work and commercialization mentoring needed to translate promising research projects and technologies into 

a viable company. This work may include technical validations, market research, clarifying intellectual property rights position and strategy and investigating commercial or business opportunities. 

‘‘(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.—The administrator of a 

Proof of Concept Partnership program shall make educational resources 

and guidance available to researchers attempting to commercialize their innovations. 

‘‘(4) AWARDS.— 

‘‘(A) SIZE OF AWARD.—The Director may make awards to a qualifying institution for up to $1,000,000 per year for up to 3 years. 

‘‘(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 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 


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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.—The pilot program under this subsection shall terminate at the 

end of fiscal year 2014.’’. 

TITLE III—OVERSIGHT AND EVALUATION 

SEC. 301. STREAMLINING ANNUAL EVALUATION REQUIREMENTS. 

Section 9(b) of the Small Business Act (15 U.S.C. 638(b)) is amended— 

(1) in paragraph (7)— 

(A) by striking ‘‘STTR programs, including the data’’ and inserting the 

following: ‘‘STTR programs, including— 

‘‘(A) the data’’; 

(B) by striking ‘‘(g)(10), (o)(9), and (o)(15), the number’’ and all that follows through ‘‘under each of the SBIR and STTR programs, and a description’’ and inserting the following: ‘‘(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 and social 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; and 

‘‘(F) a description’’; and 

(C) by striking ‘‘and’’ at the end; 

(2) in paragraph (8), by striking the period at the end and inserting ‘‘; and’’; 

and 

(3) by inserting after paragraph (8) the following: 

‘‘(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.’’. 

SEC. 302. DATA COLLECTION FROM AGENCIES FOR SBIR. 

Section 9(g) of the Small Business Act (15 U.S.C. 638(g)), as amended by this Act, 

is further amended— 

(1) by striking paragraph (10); 

(2) by redesignating paragraphs (8) and (9) as paragraphs (9) and (10), respectively; and 

(3) by inserting after paragraph (7) the following: 

‘‘(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 


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‘‘(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; 

‘‘(iv) is owned by a socially or economically disadvantaged individual 

or has a socially or economically disadvantaged individual as a principal investigator; 

‘‘(v) is a faculty member or a student of an institution of higher education, as that term is defined in section 101 of the Higher Education 

Act of 1965 (20 U.S.C. 1001); or 

‘‘(vi) is located in a State described in subsection (u)(3); and 

‘‘(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;’’. 

SEC. 303. DATA COLLECTION FROM AGENCIES FOR STTR. 

Section 9(o) of the Small Business Act (15 U.S.C. 638(o)), as amended by this Act, 

is further amended by striking paragraph (9) and inserting the following: 

‘‘(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 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; 

‘‘(iv) is owned by a socially or economically disadvantaged individual 

or has a socially or economically disadvantaged individual as a principal investigator; 

‘‘(v) is a faculty member or a student of an institution of higher education, as that term is defined in section 101 of the Higher Education 

Act of 1965 (20 U.S.C. 1001); 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; and 

‘‘(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;’’. 

SEC. 304. PUBLIC DATABASE. 

Section 9(k)(1) of the Small Business Act (15 U.S.C. 638(k)(1)) is amended— 

(1) in subparagraph (D), by striking ‘‘and’’ at the end; 

(2) in subparagraph (E), by striking the period at the end and inserting ‘‘; 

and’’; and 

(3) by adding at the end the following: 

‘‘(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 


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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; 

‘‘(iii) is owned by a socially or economically disadvantaged individual 

or has a socially or economically disadvantaged individual as a principal investigator; or 

‘‘(iv) is owned by a faculty member or a student of an institution of 

higher education, as that term is defined in section 101 of the Higher 

Education Act of 1965 (20 U.S.C. 1001).’’. 

SEC. 305. GOVERNMENT DATABASE. 

Section 9(k) of the Small Business Act (15 U.S.C. 638(k)) is amended— 

(1) in paragraph (2)— 

(A) in the matter preceding subparagraph (A), by striking ‘‘Not later’’ and 

all that follows through ‘‘Act of 2000’’ and inserting ‘‘Not later than 90 days 

after the date of enactment of the Creating Jobs Through Small Business 

Innovation Act of 2011’’; 

(B) by striking subparagraph (C); 

(C) by redesignating subparagraphs (A) and (B) as subparagraphs (B) and 

(C), respectively; 

(D) by inserting before subparagraph (B), as so redesignated, the following: 

‘‘(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, and an identifying number assigned 

by the Administration of the small business concern; 

‘‘(ii) an abstract of the 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 (iv) 

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;’’; 

(E) by redesignating subparagraphs (D) and (E) as subparagraphs (E) and 

(F), respectively; 

(F) by inserting after subparagraph (C), as so redesignated, the following: 

‘‘(D) includes, for each awardee— 

‘‘(i) the name, size, location, and any identifying number assigned to 

the awardee by the Administrator; 

‘‘(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 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;’’; 


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(G) in subparagraph (E), as so redesignated, by striking ‘‘and’’ at the end; 

(H) in subparagraph (F), as so redesignated, by striking the period at the 

end and inserting ‘‘; and’’; and 

(I) by adding at the end the following: 

‘‘(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.’’; and 

(2) in paragraph (3), by adding at the end the following: 

‘‘(C) GOVERNMENT DATABASE.—Not later than 60 days after the date established by a Federal agency for submitting applications or proposals for 

a Phase I or Phase II award under the SBIR program or STTR program, 

the head of the Federal agency shall submit to the Administrator the data 

required under paragraph (2) with respect to each small business concern 

that applies or submits a proposal for the Phase I or Phase II award.’’. 

SEC. 306. ACCURACY IN FUNDING BASE CALCULATIONS. 

(a) IN GENERAL.—Not later than 1 year after the date of enactment of this Act, 

and every year thereafter until the date that is 5 years after the date of enactment 

of this Act, the Comptroller General of the United States shall— 

(1) conduct a fiscal and management audit of the SBIR program and the 

STTR program for the applicable period to— 

(A) determine whether Federal agencies comply with the expenditure 

amount requirements under subsections (f)(1) and (n)(1) of section 9 of the 

Small Business Act (15 U.S.C. 638), as amended by this Act; 

(B) assess the extent of compliance with the requirements of section 

9(i)(2) of the Small Business Act (15 U.S.C. 638(i)(2)) by Federal agencies 

participating in the SBIR program or the STTR program and the Administration; and 

(C) determine the portion of the extramural research or research and development budget of a Federal agency that each Federal agency spends for 

administrative purposes relating to the SBIR program or STTR program, 

and for what specific purposes, including the portion, if any, of such budget 

the Federal agency spends for salaries and expenses, travel to visit applicants, outreach events, marketing, and technical assistance; and 

(2) submit a report 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 regarding 

the audit conducted under paragraph (1), including the assessments required 

under subparagraph (B), and the determination made under subparagraph (C) 

of paragraph (1). 

(b) DEFINITION OF APPLICABLE PERIOD.—In this section, the term ‘‘applicable period’’ means— 

(1) for the first report submitted under this section, the period beginning on 

October 1, 2005, and ending on September 30 of the last full fiscal year before 

the date of enactment of this Act for which information is available; and 

(2) for the second and each subsequent report submitted under this section, 

the period— 

(A) beginning on October 1 of the first fiscal year after the end of the 

most recent full fiscal year relating to which a report under this section was 

submitted; and 

(B) ending on September 30 of the last full fiscal year before the date of 

the report. 

SEC. 307. CONTINUED EVALUATION BY THE NATIONAL ACADEMY OF SCIENCES. 

Section 108 of the Small Business Reauthorization Act of 2000 (15 U.S.C. 638 

note) is amended by adding at the end the following: 

‘‘(e) EXTENSIONS AND ENHANCEMENTS OF AUTHORITY.— 

‘‘(1) IN GENERAL.—Not later than 6 months after the date of enactment of the 

Creating Jobs Through Small Business Innovation Act of 2011, the head of each 

agency described in subsection (a), in consultation with the Small Business Administration, shall cooperatively enter into an agreement with the National 

Academy of Sciences for the National Research Council to, not later than 4 

years after the date of enactment of the Creating Jobs Through Small Business 

Innovation Act of 2011, and every 4 years thereafter— 

‘‘(A) continue the most recent study under this section relating to the 

issues described in subparagraphs (A), (B), (C), and (E) of subsection (a)(1); 


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‘‘(B) conduct a comprehensive study of how the STTR program has stimulated technological innovation and technology transfer, including— 

‘‘(i) a review of the collaborations created between small businesses 

and research institutions, including an evaluation of the effectiveness 

of the program in stimulating new collaborations and any obstacles 

that may prevent or inhibit the creation of such collaborations; 

‘‘(ii) an evaluation of the effectiveness of the program at transferring 

technology and capabilities developed through Federal funding; 

‘‘(iii) an evaluation of the program’s success at commercializing technologies compared with other Federal technology transfer programs 

and the SBIR program; 

‘‘(iv) to the extent practicable, an evaluation of the economic benefits 

achieved by the STTR program, including the economic rate of return; 

‘‘(v) an analysis of how Federal agencies are using small businesses 

that have completed Phase II under the STTR program to fulfill their 

procurement needs; and 

‘‘(vi) an analysis of whether the existing STTR allocation has impacted the effectiveness of the program in achieving its goals; 

‘‘(C) make recommendations with respect to the issues described in subparagraph (A), (D), and (E) of subsection (a)(2) and subparagraph (B) of this 

paragraph; and 

‘‘(D) estimate, to the extent practicable, the number of jobs created by the 

SBIR program or STTR program of the agency. 

‘‘(2) CONSULTATION.—An agreement under paragraph (1) shall require the National Research Council to ensure that there is participation by and consultation with the small business community, the Administration, and other interested parties as described in subsection (b). 

‘‘(3) REPORTING.—An agreement under paragraph (1) shall require that— 

‘‘(A) not later than 4 years after the date of enactment of the Creating 

Jobs Through Small Business Innovation Act of 2011, and every 4 years 

thereafter, the National Research Council shall submit to the head of the 

agency entering into the agreement, 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 regarding the study conducted under paragraph (1) 

and containing the recommendations described in paragraph (1); and 

‘‘(B) not later than 2 years after the date of enactment of the Creating 

Jobs Through Small Business Innovation Act of 2011, the National Research Council shall submit to the head of the agency entering into the 

agreement, 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 

of preliminary findings and recommendations regarding the study conducted under paragraph (1)(B).’’. 

SEC. 308. TECHNOLOGY INSERTION REPORTING REQUIREMENTS. 

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is 

further amended by adding at the end the following: 

‘‘(ll) 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 made 

by the Federal agency— 

‘‘(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.’’. 

SEC. 309. OBTAINING CONSENT FROM SBIR AND STTR APPLICANTS TO RELEASE CONTACT INFORMATION TO ECONOMIC DEVELOPMENT ORGANIZATIONS. 

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is 

further amended by adding at the end the following: 

‘‘(mm) 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. 


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‘‘(2) RULES.—The Administrator shall establish rules to implement this subsection. The rules shall include a requirement that a Federal agency include in 

the SBIR and STTR application a provision through which the applicant can indicate consent for purposes of paragraph (1).’’. 

SEC. 310. PILOT TO ALLOW FUNDING FOR ADMINISTRATIVE, OVERSIGHT, AND CONTRACT 

PROCESSING COSTS. 

(a) IN GENERAL.—Section 9 of the Small Business Act (15 U.S.C. 638), as amended 

by this Act, is further amended by adding at the end the following: 

‘‘(nn) ASSISTANCE FOR ADMINISTRATIVE, OVERSIGHT, AND CONTRACT PROCESSING

COSTS.— 

‘‘(1) IN GENERAL.—Subject to paragraph (2), for the 3 full fiscal years beginning after the date of enactment of this subsection, 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 and personnel interviews; 

‘‘(C) the implementation of commercialization and outreach initiatives 

that were not in effect on the date of enactment of this subsection; 

‘‘(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) carrying out subsection (hh); 

‘‘(J) contract processing costs relating to the SBIR program or STTR program of the Federal agency; and 

‘‘(K) funding for additional personnel and assistance with application reviews. 

‘‘(2) PERFORMANCE CRITERIA.—A Federal agency may not use funds as authorized under paragraph (1) until after the effective date of performance criteria, 

which the Administrator shall establish, to measure any benefits of using funds 

as authorized under paragraph (1) and to assess continuation of the authority 

under paragraph (1). 

‘‘(3) RULES.—Not later than 180 days after the date of enactment of this subsection, the Administrator shall issue rules to carry out this subsection. 

‘‘(4) COORDINATION WITH IG.—Each Federal agency shall coordinate the activities funded under subparagraph (E), (F), or (G) of paragraph (1) with their respective Inspectors General, when appropriate, and each Federal agency that allocates more than $50,000,000 to the SBIR program of the Federal agency for 

a fiscal year may share such funding with its Inspector General when the Inspector General performs such activities.’’. 

(b) TECHNICAL AND CONFORMING AMENDMENTS.— (1) IN GENERAL.—Section 9 of the Small Business Act (15 U.S.C. 638), as 

amended by this Act, is further amended— 

(A) in subsection (f)(2), by striking ‘‘shall not’’ and all that follows through 

‘‘make available for the purpose’’ and inserting ‘‘shall not make available 

for the purpose’’; and 

(B) in subsection (y)— 

(i) by striking paragraph (4); and 

(ii) by redesignating paragraphs (5) and (6) as paragraphs (4) and (5), 

respectively. 

(2) TRANSITIONAL RULE.—Notwithstanding the amendments made by paragraph (1), subsection (f)(2) and (y)(4) of section 9 of the Small Business Act (15 

U.S.C. 638), as in effect on the day before the date of enactment of this Act, 

shall continue to apply to each Federal agency until the effective date of the 

performance criteria established by the Administrator under subsection (nn)(2) 

of section 9 of the Small Business Act, as added by subsection (a). 

(3) PROSPECTIVE REPEAL.—Effective on the first day of the fourth full fiscal 

year following the date of enactment of this Act, section 9 of the Small Business 

Act (15 U.S.C. 638), as amended by paragraph (1) of this section, is amended— 


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(A) in subsection (f)(2), by striking ‘‘shall not make available for the purpose’’ and inserting the following: ‘‘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’’; and 

(B) in subsection (y)— 

(i) by redesignating paragraphs (4) and (5) as paragraphs (5) and (6), 

respectively; and 

(ii) by inserting after paragraph (3) the following: 

‘‘(4) FUNDING.— ‘‘(A) IN GENERAL.—The Secretary of Defense and each Secretary of a military department may use not more than an amount equal to 1 percent of 

the funds available to the Department of Defense or the military department pursuant to the Small Business Innovation Research Program for 

payment of expenses incurred to administer the Commercialization Pilot 

Program under this subsection. 

‘‘(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.’’. 

SEC. 311. GAO STUDY WITH RESPECT TO VENTURE CAPITAL OPERATING COMPANY, HEDGE 

FUND, AND PRIVATE EQUITY FIRM INVOLVEMENT. 

Not later than 2 years after the date of enactment of this Act, and every 2 years 

thereafter, the Comptroller General of the United States shall— 

(1) conduct a study of the impact of requirements relating to venture capital 

operating company, hedge fund, and private equity firm involvement under section 9 of the Small Business Act; and 

(2) submit to Congress a report regarding the study conducted under paragraph (1). 

SEC. 312. REDUCING VULNERABILITY OF SBIR AND STTR PROGRAMS TO FRAUD, WASTE, AND 

ABUSE. 

(a) FRAUD, WASTE, AND ABUSE PREVENTION.— 

(1) AMENDMENTS REQUIRED FOR FRAUD, WASTE, AND ABUSE PREVENTION.—Not 

later than 90 days after the date of enactment of this Act, the Administrator 

shall amend the SBIR Policy Directive and the STTR Policy Directive to include 

measures to prevent fraud, waste, and abuse in the SBIR program and the 

STTR program. 

(2) CONTENT OF AMENDMENTS.—The amendments required under paragraph 

(1) shall include— 

(A) definitions or descriptions of fraud, waste, and abuse; 

(B) guidelines for the monitoring and oversight of applicants to and recipients of awards under the SBIR program or the STTR program; 

(C) a requirement that each Federal agency that participates in the SBIR 

program or STTR program include information concerning the method established by the Inspector General of the Federal agency to report fraud, 

waste, and abuse (including any telephone hotline or Web-based platform)— 

(i) on the website of the Federal agency; and 

(ii) in any solicitation or notice of funding opportunity issued by the 

Federal agency for the SBIR program or the STTR program; and 

(D) a requirement that each applicant for and small business concern 

that receives funding under the SBIR program or the STTR program shall 

certify whether the applicant or small business concern is in compliance 

with the laws relating to the SBIR program and the STTR program and the 

conduct guidelines established under the SBIR Policy Directive and the 

STTR Policy Directive. 

(3) CONSULTATION.—The Administrator shall develop the certification required under paragraph (2)(D) in cooperation with the Council of Inspectors 

General on Integrity and Efficiency and the Office of Advocacy of the Administration. 

(4) INSPECTORS GENERAL.—The Inspector General of each Federal agency that 

participates in the SBIR program or STTR program shall cooperate to prevent 

fraud, waste, and abuse in the SBIR program and the STTR program by— 

(A) establishing fraud detection indicators; 

(B) reviewing regulations and operating procedures of the Federal agency; 

(C) coordinating information sharing between Federal agencies, to the extent otherwise permitted under Federal law; and 


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(D) improving the education and training of, and outreach to— 

(i) administrators of the SBIR program and the STTR program of the 

Federal agency; 

(ii) applicants to the SBIR program or the STTR program; and 

(iii) recipients of awards under the SBIR program or the STTR program. 

(b) STUDY AND REPORT.—Not later than 1 year after the date of enactment of this 

Act to establish a baseline of changes made to the program to fight fraud, waste, 

and abuse, and every 3 years thereafter to evaluate the effectiveness of the agency 

strategies, the Comptroller General of the United States shall— 

(1) conduct a study that evaluates— 

(A) the implementation by each Federal agency that participates in the 

SBIR program or the STTR program of the amendments to the SBIR Policy 

Directive and the STTR Policy Directive made pursuant to subsection (a); 

(B) the effectiveness of the management information system of each Federal agency that participates in the SBIR program or STTR program in 

identifying duplicative SBIR and STTR projects; 

(C) the effectiveness of the risk management strategies of each Federal 

agency that participates in the SBIR program or STTR program in identifying areas of the SBIR program or the STTR program that are at high risk 

for fraud; 

(D) technological tools that may be used to detect patterns of behavior 

that may indicate fraud by applicants to the SBIR program or the STTR 

program; 

(E) the success of each Federal agency that participates in the SBIR program or STTR program in reducing fraud, waste, and abuse in the SBIR 

program or the STTR program of the Federal agency; and 

(F) the extent to which the Inspector General of each Federal agency that 

participates in the SBIR and STTR program effectively conducts investigations, audits, inspections, and outreach relating to the SBIR and STTR programs of the Federal agency; and 

(2) submit to the Committee on Small Business and Entrepreneurship of the 

Senate, the Committee on Small Business and the Committee on Science, 

Space, and Technology of the House of Representatives, and the head of each 

Federal agency that participates in the SBIR program or STTR program a report on the results of the study conducted under subparagraph (A). 

SEC. 313. SIMPLIFIED PAPERWORK REQUIREMENTS. 

Section 9(v) of the Small Business Act (15 U.S.C. 638(v)) is amended— 

(1) in the subsection heading, by striking ‘‘SIMPLIFIED REPORTING REQUIRE- MENTS’’ and inserting ‘‘REDUCING PAPERWORK AND COMPLIANCE BURDEN’’; 

(2) by striking ‘‘The Administrator’’ and inserting the following: 

‘‘(1) STANDARDIZATION OF REPORTING REQUIREMENTS.—The Administrator’’; 

and 

(3) by adding at the end the following: 

‘‘(2) SIMPLIFICATION OF APPLICATION AND AWARD PROCESS.—Not later than one 

year after the date of enactment of this paragraph, and after a period of public 

comment, the Administrator shall issue regulations or guidelines, taking into 

consideration the unique needs of each Federal agency, to ensure that each Federal agency required to carry out an SBIR program or STTR program simplifies 

and standardizes the program proposal, selection, contracting, compliance, and 

audit procedures for the SBIR program or STTR program of the Federal agency 

(including procedures relating to overhead rates for applicants and documentation requirements) to reduce the paperwork and regulatory compliance burden 

on small business concerns applying to and participating in the SBIR program 

or STTR program.’’. 

SEC. 314. REDUCING FRAUD, WASTE, AND ABUSE. 

Not later than 4 years after the date of enactment of this Act, and every 4 years 

thereafter, the Comptroller General of the United States shall— 

(1) conduct a study of the effectiveness of the government and public databases described in section 9(k) of the Small Business Act (15 U.S.C. 638(k)) in 

reducing vulnerabilities of the SBIR program and the STTR program to fraud, 

waste, and abuse, particularly with respect to Federal agencies funding duplicative proposals and business concerns falsifying information in proposals; 

(2) make recommendations with respect to the issues described in paragraph 

(1); and 

(3) submit to the head of each agency described in section 108(a) of the Small 

Business Reauthorization Act of 2000 (15 U.S.C. 638 note), the Committee on 

Small Business and Entrepreneurship of the Senate, and the Committee on 


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Small Business and the Committee on Science, Space, and Technology of the 

House of Representatives a report regarding the study conducted under paragraph (1) and containing the recommendations described in paragraph (2). 

TITLE IV—POLICY DIRECTIVES 

SEC. 401. CONFORMING AMENDMENTS TO THE SBIR AND THE STTR POLICY DIRECTIVES. 

(a) IN GENERAL.—Not later than 180 days after the date of enactment of this Act, 

the Administrator shall promulgate amendments to the SBIR Policy Directive and 

the STTR Policy Directive to conform such directives to this Act and the amendments made by this Act. 

(b) PUBLISHING SBIR POLICY DIRECTIVE AND THE STTR POLICY DIRECTIVE IN THE

FEDERAL REGISTER.—Not later than 180 days after the date of enactment of this 

Act, the Administrator shall publish the amended SBIR Policy Directive and the 

amended STTR Policy Directive in the Federal Register. 

TITLE V—OTHER PROVISIONS 

SEC. 501. REPORT ON SBIR AND STTR PROGRAM GOALS. 

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is 

further amended by adding at the end the following: 

‘‘(oo) 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.—The head of each Federal agency described in paragraph (1) shall submit to the appropriate committees of Congress and the 

Administrator an annual report describing in detail the results of an evaluation conducted under paragraph (2). 

‘‘(B) PUBLIC AVAILABILITY OF REPORT.—The head of each Federal agency 

described in paragraph (1) shall make each report submitted under subparagraph (A) available to the public online. 

‘‘(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.’’. 

SEC. 502. COMPETITIVE SELECTION PROCEDURES FOR SBIR AND STTR PROGRAMS. 

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is 

further amended by adding at the end the following: 

‘‘(pp) COMPETITIVE SELECTION PROCEDURES FOR SBIR AND STTR PROGRAMS.—All 

funds awarded, appropriated, or otherwise made available in accordance with subsection (f) or (n) must be awarded pursuant to competitive and merit-based selection 

procedures.’’. 

SEC. 503. LOAN RESTRICTIONS. 

(a) RULE REQUIRED.—For purposes of section 9 of the Small Business Act (15 

U.S.C. 638), the Administrator shall promulgate a rule not later than 180 days after 

the date of enactment of this Act that determines what restrictions, conditions, or 

covenants contained in a note, bond, debenture, other evidence of indebtedness, or 

preferred stock constitute affiliation for purposes of section 121.103(a) of title 13, 

Code of Federal Regulations, as in effect on January 1, 2011. 

(b) FAILURE TO PROMULGATE.—If the Administrator fails to promulgate a rule in 

the time period required under subsection (a), the holder of a note, bond, debenture, 


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other evidence of indebtedness, or preferred stock shall be considered to be affiliated 

with the debtor or issuer of the preferred stock until such time as the Administrator 

promulgates the rule required under subsection (a). 

SEC. 504. PROGRAM DIVERSIFICATION. 

Federal agencies shall encourage applications under the SBIR and STTR programs (to the extent that the projects relate to the mission of the Federal agency) 

from— 

(1) small business concerns in geographic areas underrepresented in the SBIR 

and STTR programs or located in rural areas (as defined in section 1393(a)(2) 

of the Internal Revenue Code of 1986); 

(2) small business concerns owned and controlled by women; 

(3) small business concerns owned and controlled by veterans; 

(4) small business concerns owned and controlled by minorities; 

(5) small business concerns owned and controlled by people with disabilities; 

and 

(6) small business concerns located in a geographic area with an unemployment rate that exceeds the national unemployment rate, based on the most recently available monthly publications of the Bureau of Labor Statistics of the 

Department of Labor. 

II. PURPOSE AND SUMMARY

The purpose of H.R. 1425 is to reauthorize the Small Business 

Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs through Fiscal Year 2014, to increase SBIR 

and STTR award sizes to reflect changes in inflation, to allow small 

businesses with majority venture capital backing to compete for a 

limited percentage of awards, and to collect better data on the 

SBIR and STTR programs to evaluate the effectiveness of the programs and to prevent fraud, waste, and abuse. 

III. BACKGROUND AND NEED FOR THE LEGISLATION

The Small Business Innovation Research (SBIR) program was 

originally established when the Congress passed the Small Business Innovation Development Act in 1982 (P.L. 97–219). 

The original objectives of the SBIR program included: 

• Stimulation of technological innovation in the small business sector; 

• Increased use of the small business sector to meet the government’s research and development (R&D) needs; 

• Additional involvement of minority and disadvantaged individuals in the process; and 

• Expanded commercialization of the results of federally 

funded R&D. 

The 1992 SBIR reauthorization (P.L. 102–564) placed greater emphasis on the objective of commercialization of SBIR projects. 

Current law requires that every federal department with an extramural R&D budget of $100 million or more establish and operate an SBIR program. Eleven federal departments have SBIR programs, including the Departments of Agriculture, Commerce, Defense, Education, Energy, Health and Human Services, Homeland 

Security, and Transportation; the Environmental Protection Agency, the National Aeronautics and Space Administration (NASA); 

and the National Science Foundation (NSF). Under the program, 

each qualifying federal department is mandated to set aside 2.5 

percent of its applicable extramural R&D for the SBIR program. 

Cumulatively, the SBIR program makes almost $2 billion in 

awards to small businesses annually. 


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The Small Business Technology Transfer (STTR) program was 

created in 1992 to provide federal R&D funding for research proposals that are developed and executed cooperatively between a 

small firm and a scientist in a nonprofit research organization, and 

fall under the mission requirements of the federal funding agency. 

Federal departments with annual extramural research budgets 

over $1 billion must set aside 0.3 percent for STTR programs. Currently, the Departments of Energy, Defense, and Health and 

Human Services, as well as NASA and NSF participate in the 

STTR program. Across the participating agencies, approximately 

$800 million in STTR awards are made annually. 

The SBIR and STTR programs have been operating under temporary extensions since their authorizations expired in 2008 and 

2009, respectively. This bill will increase the size guidelines for 

award amounts for Phase I and Phase II SBIR and STTR awards, 

will enable majority venture capital backed firms to compete for a 

limited percentage of SBIR awards, and will improve evaluation of 

the programs through greater data collection, sharing of best practices, and increased efforts to prevent fraud, waste, and abuse. 

H.R. 1425 will reauthorize the SBIR and the STTR programs 

through Fiscal Year 2014. 

IV. HEARING SUMMARY

The Technology and Innovation Subcommittee of the Committee 

on Science, Space, and Technology held a hearing on March 31, 

2011 entitled ‘‘The Role of Small Business in Innovation and Job 

Creation: The SBIR and STTR Programs.’’ The purpose of the hearing was to examine the role of the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer (STTR) 

Programs in promoting innovation. 

The Subcommittee received testimony from: Dr. Sally Rockey, 

Deputy Director for Extramural Research at the National Institutes of Health; Dr. Donald Siegel, Dean and Professor at the 

School of Business, University at Albany, State University of New 

York, and a Member of the research team for the Committee for 

Capitalizing on Science, Technology, and Innovation, National Research Council of the National Academies; Mr. Mark Crowell, Executive Director and Associate Vice President for Innovation Partnerships and Commercialization at the University of Virginia; Mr. 

Doug Limbaugh, Chief Executive Officer of Kutta Technologies; and 

Ms. Laura McKinney, President and Chief Executive Officer of 

Galois, Inc. 

V. COMMITTEE CONSIDERATION

On April 7, 2011, H.R. 1425, the Creating Jobs Through Small 

Business Innovation Act of 2011 was introduced by Rep. Renee 

Ellmers (R-NC 2), and co-sponsored by Rep. Jason Altmire (D-PA 

4), Rep. Judy Biggert (R-IL 13), Rep. Howard Coble, (R-NC 6), Rep. 

Sam Graves (R-MO 6), Rep. Ralph Hall (R-TX 4), Rep. Eddie Bernice Johnson (D-TX 30), Rep. Daniel Lipinski (D-IL 3), Rep. Benjamin Quayle (R-AZ 3), Rep. Cedric L. Richmond (D-LA 2), and 

Rep. David Wu (D-OR 1). H.R. 1425 was referred to the Committee 

on Small Business and the Committee on Science, Space, and Technology and the Committee on Armed Services. 


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On April 13, 2011 the Subcommittee on Technology and Innovation met to consider H.R. 1425 and ordered it favorably reported 

to the Full Committee, as amended, by voice vote. 

On May 4, 2011 the Committee on Science, Space, and Technology met in open markup session and ordered H.R. 1425, favorably reported to the House, as amended, by voice vote. 

VI. COMMITTEE VOTES

Clause 3(b) of rule XIII of the Rules of the House of Representatives requires the Committee to list the record votes on the motion 

to report legislation and amendments thereto. A motion to order 

H.R. 1425, favorably reported to the House, as amended, was 

agreed to by a voice vote. 

During Subcommittee on Technology and Innovation consideration of H.R. 1425 the following amendments were considered: 


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During Full Committee consideration of H.R. 1425 the following 

amendments were considered: 


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VII. SUMMARY OF MAJOR PROVISIONS OF THE BILL

TITLE I—REAUTHORIZATION

Extension length 

H.R. 1425 reauthorizes the SBIR and STTR programs for 3 years 

until September 30, 2014. 

SBIR and STTR award levels 

The bill increases the size of SBIR and STTR awards from 

$100,000 to $150,000 for Phase I, and from $750,000 to $1 million 

for Phase II, and requires the SBA to make annual adjustments of 

the award sizes for inflation. Agencies are prohibited from issuing 

an SBIR or STTR award if the size of the award exceeds the award 

guidelines established in this section by more than 50 percent. 

Agency and program flexibility 

H.R. 1425 allows SBIR and STTR applicants to receive awards 

for subsequent SBIR or STTR phases at another agency and also 

allows small business concerns which received SBIR or STTR 

awards to receive awards for subsequent phases in either the STTR 

or SBIR program, respectively. Agencies are also permitted to 

make a Phase II award to a small business concern that has already completed the work typically done during Phase I, and to 

make a sequential Phase II award for a single project. For all 

awards, agencies must verify that any activity to be performed 

with respect to a project with a Phase I and Phase II award has 

not been funded from another federal agency. 

Participation by firms with substantial investment from multiple 

venture capital operating companies in a portion of the SBIR 

Program 

The National Institutes of Health, the Department of Energy, the 

National Aeronautics and Space Administration, and the National 

Science Foundation (NSF) are permitted to award up to 45 percent 

of SBIR funds to firms owned in majority part by multiple venture 

capital companies, hedge funds, or private equity firms. All other 

SBIR federal agencies shall allow small businesses owned in majority part by multiple venture capital companies, hedge funds, or private equity firms to compete for up to 35 percent of the agency’s 

SBIR funds. The bill defines what affiliations are between various 

outside investors (such as venture capital companies, private equity 

firms, etc.) and small business concerns for purposes of determining whether the combination is eligible for an award under the 

SBIR program. 

Collaborating with federal laboratories and research and development centers 

The bill reduces the burden on cooperation between SBIR/STTR 

firms and federal laboratories by ensuring that such subcontracting 

is generally permitted without the requirement for a waiver. The 

provision also ensures that subcontracting to federal laboratories is 

not required of SBIR or STTR awardees. Further, it clarifies that 

firms that have entered into a cooperative agreement with a federal laboratory are eligible to receive SBIR/STTR awards. Finally, 


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the section limits the required advance payment from a small business concern working with a federal laboratory or federally funded 

research and development center to 30 days for expenses. 

TITLE II COMMERCIALIZATION AND OUTREACH INITIATIVES

Technical assistance for awardees 

H.R. 1425 increases the amount of discretionary technical assistance that SBIR and STTR agencies can contract out to provide to 

awardees from $4,000 to $5,000 for Phase I awards and from 

$4,000 to $5,000 per year for Phase II awards. It also requires 

agencies to provide SBIR and STTR award winners who wish to 

procure their own technical assistance with the allowable amount. 

Commercialization Readiness Program and Pilot 

The SBIR Commercialization Pilot Program (CPP) at the Department of Defense (DOD) is made permanent and extends it to the 

department’s STTR program. The provision authorizes the Secretary of Defense to establish goals for transitioning Phase III technologies in subcontracting plans for contracts of $100 million or 

more. The provision also requires the Secretary of Defense to set 

a goal to increase the number of Phase II contracts that lead to 

technology transition into programs of record or fielded systems 

and to use incentives to encourage agency program managers and 

prime contractors to meet that goal. All non-DOD SBIR agencies 

are authorized to create Commercialization Readiness Pilot Programs (using no more than 10% of their program authorization) to 

grant post-Phase II awards up to $3 million to support advanced 

development of small business technologies. 

Interagency Policy Committee 

H.R. 1425 directs the Office of Science and Technology Policy to 

establish an SBIR/STTR Interagency Policy Committee to review 

and make policy recommendations on ways to improve the effectiveness and efficiency of the SBIR and STTR programs. 

Shortened period for final decisions on proposals and applications 

Section 206 of H.R. 1425 requires that not later than 90 days 

after, and if the Administrator authorizes an extension, then not 

later than 180 days, from the date on which the solicitation closes 

for SBIR and STTR programs, that the Administrator make a decision on each proposal submitted. It also allows the Director of the 

National Institutes of Health (NIH) to make an award under the 

SBIR or STTR programs provided an application for award undergoes a technical and scientific peer review 

TITLE III—OVERSIGHT AND EVALUATION

Streamlining annual evaluation requirements 

This provision requires the Administration to report to Congress 

at least annually the number of proposals received from firms with 

venture capital, private equity, or hedge fund investment, including 

those owned and controlled by multiple venture capital, private equity, or hedge fund firms. It also requires the Administration to report on efforts to increase outreach to firms owned and controlled 

by women and socially or economically disadvantaged individuals, 


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the implementation and compliance with the allocation of funds for 

firms majority owned and controlled by multiple venture capital, 

private equity or hedge fund companies, and appeals of Phase III 

awards and notices of noncompliance with the SBIR and the STTR 

Policy Directives. 

Finally, the section requires the Administration to coordinate the 

implementation of electronic databases at the participating agencies. 

Public and government databases and data collection 

The bill requires that the public database maintained by the Administrator include information on the ownership makeup of a 

firm, and that the government database maintained by the Administrator in coordination with the agencies for the purposes of evaluation of the SBIR and STTR programs include information on the 

ownership structure and affiliations of awardee firms. Agencies 

must annually collect this data. 

Continued evaluation by the National Academy of Sciences 

This section requires the head of each Agency described in subsection (a) to cooperatively enter into an agreement with the National Academy of Sciences for the National Research Council to 

continue its evaluation of the SBIR program through the end of fiscal year 2021 and requires that updates of the studies be provided 

to Congress every four years from the date of enactment. The section also authorizes the National Research Council to expand its 

study to include a study of how the STTR program has stimulated 

technological innovation and used small businesses to meet Federal 

technology transfer objectives. 

Pilot to allow funding for administrative, oversight, and contract 

processing costs 

H.R. 1425 requires that the Administrator allow each Federal 

agency to use not more than 3 percent of the funds allocated to the 

SBIR programs for costs relating to administrative, oversight and 

contract processing activities for SBIR programs, commercialization 

initiatives, technical assistance initiatives, and outreach initiatives 

to raise awareness of, and increase participation in, the SBIR and 

STTR programs. 

Reducing vulnerability of SBIR and STTR programs to fraud, 

waste, and abuse 

Language in H.R. 1425 requires the Administrator to, not later 

than 90 days after the enactment of this Act, amend the SBIR Policy Directive and the STTR Policy Directive to include a set of specific measures to prevent fraud, waste, and abuse. The section also 

requires the Inspectors General of participating Federal agencies to 

coordinate activities to prevent and detect fraud, waste, and abuse. 

TITLE IV—POLICY DIRECTIVES

Conforming amendments to the SBIR and the STTR policy directives 

The bill requires conforming amendments to the SBA’s SBIR and 

STTR Policy Directives within 180 days to implement the proviVerDate Mar 15 2010 18:05 Jun 02, 2011 Jkt 099006 PO 00000 Frm 00040 Fmt 6659 Sfmt 6602 E:\HR\OC\HR090P1.XXX HR090P1

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sions of this Act. It also requires that the Administration publish 

the SBIR and STTR Policy Directives in the Code of Federal Regulations within 180 days 

TITLE V—OTHER PROVISIONS

H.R. 1425 includes provisions: requiring agencies to develop 

metrics and annually evaluate their programs; articulating that all 

SBIR and STTR awards are made through a competitive, meritbased process; requiring the SBA to develop regulations regarding 

small business loan restrictions; and requiring participating Federal agencies to encourage SBIR and STTR applications from 

underrepresented business groups. 

VIII. COMMITTEE VIEWS

In 1982, legislators created the SBIR program to incorporate 

more small businesses into the federal research innovation partnership. The program later expanded to the STTR program, incorporating research institutions to collaborate with small businesses. 

The SBIR program has been found by the National Research Council, an independent body, in the Council’s Assessment of the SBIR 

Program to be ‘‘sound in concept and effective in practice.’’ 

The SBIR and STTR programs have been significant engines of 

job creation and have been catalysts for innovation across our nation. The Committee supports the reauthorization of these vital 

programs. 

Increased award sizes 

The Committee agrees with National Research Council recommendations to increase SBIR and STTR program award sizes 

from $100,000 to $150,000 for Phase I awards and from $750,000 

to $1 million for Phase II awards. These award sizes reflect increases in inflation since the previous award guidelines were set, 

allowing Phase I and Phase II awards to better achieve their research and development objectives. 

Increased data collection for program evaluation 

It is extremely important to measure the effectiveness and the efficiency of the SBIR and STTR programs in achieving their objectives. There is currently a lack of sufficient detailed information 

about participation in, and outcomes of, the SBIR and STTR programs across the agencies. Therefore, H.R. 1425 requires participating Federal agencies to collect more data on program participants and maintain greater information on program administration. The Committee expects that this data will inform future SBIR 

and STTR program authorizations and regulations, helping taxpayers achieve a stronger return on their investment. 

Interagency policy committee 

The Committee anticipates that the Interagency Policy Committee, established in Section 204 of the bill, will be jointly chaired 

by OSTP and the Small Business Administration, and include 

members from the SBIR and STTR agencies, as well as the Office 

of Management and Budget. The Interagency Policy Committee 

should utilize the increased collection of data required under H.R. 


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1425 to make recommendations on ways to improve the outcomes 

and administration of the SBIR and STTR programs. 

Shortened period for final decisions on proposals and applications 

H.R. 1425 includes a requirement for agencies to make a final 

decision on proposals not later than 90 days after a SBIR or STTR 

solicitation has closed. The intent of this provision is to ensure that 

small businesses receive information about their applications in a 

timely manner. 

The Committee added a provision in subcommittee markup, permitting both the National Science Foundation (NSF) and the National Institutes of Health (NIH) an exemption from this requirement, in order to allow these two agencies to fulfill their standard 

peer review requirements, which typically take longer than 90 days 

to complete. The Committee’s view is that these two agencies have 

a rigorous peer review process to which all extramural research 

grants are subjected, and that this process ensures the high quality 

of SBIR and STTR grants. 

However, the Committee does not intend for the NSF and NIH 

peer review exemption to allow these agencies to ignore the 90-day 

requirement. Both agencies should strive to adhere to Section 206, 

and when the peer review process necessitates exceeding the 90- 

day requirement, NSF and NIH program administrators should 

make every effort to make decisions on grants as expeditiously as 

possible. 

Administration, oversight, and outreach 

The bill provides agencies the ability, for the first time, to use 

up to three percent of SBIR program funding to support outreach 

and other administrative activities. The Committee supports the 

flexibility of the provision, which allows agencies the ability to 

choose how these funds can be used. Allowable activities for the 

three percent include: program administration and personnel, outreach and technical assistance, commercialization outreach initiatives, and prevention of waste, fraud and abuse. As provided in 

H.R. 1425, an agency may choose to spend any or all of that funding on any of these activities. 

The 1982 Act that established the SBIR program included four 

primary goals. One of those goals was ‘‘to foster and encourage participation by minority and disadvantaged persons in technological 

innovation’’. This goal remains unchanged, and all SBIR agencies 

are working to achieve this goal. To gather specific data on this 

topic, H.R. 1425 requires all participating agencies to report on the 

extent to which it is increasing outreach and awards to firms 

owned and controlled by women and social or economically disadvantaged individuals. GAO is also tasked with reporting exactly 

how much money agencies are spending on outreach activities. 

Recognizing that the SBIR program is utilized by 11 different 

agencies with different needs, the Committee supports the flexibility provided for the three percent pilot program and not further 

restricting how these funds may be spent. The Committee expects 

that each agency will strive to encourage applications from individuals that are shown to be underrepresented in the SBIR/STTR programs. 


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Maintaining the current amount set-aside from agency research 

budgets for SBIR and STTR 

The Committee did not include a provision to increase the percentage of extramural research and development funding allocated 

to the SBIR or STTR programs. Federal research agencies face 

tight budgets in the future, and current competition for extramural 

research grants is very high. The Committee’s view historically has 

been that the SBIR and STTR programs are very successful, but 

should grow as the overall agency budget grows. Committee Members do not see significant justification to increase the size of these 

programs at the cost of decreasing the remainder of the extramural 

research budgets. 

Recognizing that H.R. 1425 makes a number of significant 

changes to the current program, the Committee acknowledges that 

the overall demand for SBIR and STTR awards could be impacted. 

Consequently, the Committee supports the three-year authorization, as further modifications to the program, including revisiting 

the merits of changing the set-aside amount, will be prudent after 

three years. 

Participation of small businesses owned in majority part by multiple venture capital operating companies 

The Committee believes that allowing small businesses that are 

owned in majority part by multiple venture capital companies to 

compete for a limited percentage of SBIR awards will increase the 

applicant pool and potentially lead to better research and development projects. 

In a 2009 study entitled, Venture Funding and the NIH SBIR 

Program, the National Research Council stated that the 2003 SBA 

Administrative Law ruling prohibiting majority venture capital 

backed firms from participating in the SBIR program ‘‘falls disproportionately on the most promising firms—i.e., those firms that 

have repeatedly been selected by both NIH for their promising 

technologies and by venture investors for their commercial potential.’’ The Committee feels the absence of these companies in the 

program may have diminished the research and development outcomes of the program. 

However, the Committee also believes that the SBIR program 

should reserve a majority of program funding for small businesses 

that don’t have majority venture capital backing. Therefore, the 

maximum percentage of SBIR award funding for which a company 

with majority venture capital backing can compete is 45 percent at 

the National Institutes of Health, the Department of Energy, the 

National Aeronautics and Space Administration, and the National 

Science Foundation. The maximum percentage at all other participating agencies is 35 percent. 

The Committee supports a three-year reauthorization period to 

measure the effectiveness of these changes to the legislation. 

Measures to detect and prevent fraud, waste and abuse 

H.R. 1425 includes several new measures to detect and prevent 

fraud, waste, and abuse in the SBIR and STTR programs. The bill 

requires that the government database maintained by the SBA Administrator and participating Federal agencies include identifying 

information on SBIR and STTR applicants and recipients. The 


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Committee believes this enhanced information will help program 

administrators prevent the provision of duplicate awards for similar work across different participating Federal agencies. The Committee also supports provisions that require participating agency 

Inspectors General to cooperate to prevent fraud, waste, and abuse 

through coordination of activities and sharing of best practices. 

IX. COMMITTEE OVERSIGHT FINDINGS

Pursuant to clause 3(c)(1) of rule XIII of the Rules of the House 

of Representatives, the Committee held an oversight hearing and 

made findings that are reflected in the descriptive portions of this 

report. 

X. STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

In accordance with clause 3(c)(4) of rule XIII of the Rules of the 

House of Representatives, the performance goals and objectives of 

the Committee are reflected in the descriptive portions of this report, including the goal to reauthorize the Small Business Innovation Research Program (SBIR) and the Small Business Technology 

Transfer Program (STTR) to create jobs through innovation while 

evaluating each program’s effectiveness and preventing fraud, 

waste, and abuse. 

XI. NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX

EXPENDITURES

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee adopts as its own the estimate of new budget authority, entitlement authority, or tax expenditures or revenues contained in the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

XII. ADVISORY ON EARMARKS

In compliance with clause 9(e), 9(f), and 9(g) of rule XXI, the 

Committee finds that H.R. 1425, the ‘‘Creating Jobs Through Small 

Business Innovation Act of 2011’’, contains no earmarks. 

XIII. COMMITTEE COST ESTIMATE

The Committee adopts as its own the cost estimate prepared by 

the Director of the Congressional Budget Office pursuant to section 

402 of the Congressional Budget Act of 1974. 

XIV. CONGRESSIONAL BUDGET OFFICE ESTIMATE

Pursuant to clause 3(c)(3) of rule XIII of the Rules of the House 

of Representatives, the following is the cost estimate provided by 

the Congressional Budget Office pursuant to section 402 of the 

Congressional Budget Act of 1974. 


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MAY 18, 2011. 

Hon. RALPH M. HALL, 

Chairman, Committee on Science, Space, and Technology, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 1425, the Creating Jobs 

Through Small Business Innovation Act of 2011. 

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

to provide them. The CBO staff contact is Susan Willie. 

Sincerely, 

DOUGLAS W. ELMENDORF. 

Enclosure. 

H.R. 1425–Creating Job Through Small Business Innovation Act of 

2011 

Summary: H.R. 1425 would extend and expand programs that require certain federal agencies to set aside portions of their research 

and development budgets for small businesses. The bill also would 

require participating agencies to collect and report information 

about program participants that would be used both for program 

evaluation and for business development. In addition, H.R. 1425 

would authorize the Government Accountability Office (GAO) and 

the National Academy of Sciences (NAS) to study the operation and 

effectiveness of the programs. 

Based on information from the Small Business Administration 

(SBA) and other participating agencies, CBO estimates that implementing H.R. 1425 would cost $14 million over the 2012–2016 period, subject to appropriation of the necessary amounts. Pay-asyou-go procedures do not apply to this legislation because it would 

not affect direct spending or revenues. 

H.R. 1425 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA) 

and would impose no costs on state, local, or tribal governments. 

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 1425 is shown in the following table. The costs 

of this legislation fall within several budget functions, including 

050 (national defense), 250 (general science, space, and technology), 

and 550 (health). 

By fiscal year, in millions of dollars— 

2012 2013 2014 2015 2016 2012– 

2016 

CHANGES IN SPENDING SUBJECT TO APPROPRIATION 

National Academy of Science Study: 

Estimated Authorization Level ............................................. 6 0 0 0 8 14 

Estimated Outlays ............................................................... 1 2 2 1 1 7 

Additional Agency Activities: 

Estimated Authorization Level ............................................. 3 2 1 1 1 8 

Estimated Outlays ............................................................... 2 2 1 1 1 7 

Total Changes Under H.R. 1425: 

Estimated Authorization Level .................................... 9 2 1 1 9 22 

Estimated Outlays ...................................................... 3 4 3 2 2 14 

Basis of estimate: Under current law, the Small Business Innovation Research (SBIR) program requires federal agencies with extramural budgets for research and development (R&D) that exceed 


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$100 million per year to set aside 2.5 percent of that budget for 

contracts with small businesses. (Extramural budgets consist of expenditures for activities not performed by agency employees.) Likewise, the Small Business Technology Transfer (STTR) program requires federal agencies with extramural budgets for R&D that exceed $1 billion per year to set aside 0.3 percent of that budget for 

cooperative research between small businesses and a federal laboratory or nonprofit research institution. Eleven agencies currently 

participate in one or both programs, including the Departments of 

Defense, Health and Human Services, Energy, Agriculture, and 

Homeland Security, as well as the National Aeronautics and Space 

Administration, the National Science Foundation, and the Environmental Protection Agency. 

The cost of those programs to the participating agencies consists 

primarily of personnel and associated overhead expenses to solicit 

applications, award contracts, prepare reports, and track outcomes. 

The organizational structure of the program offices varies. Some 

agencies have full-time staff members devoted to the SBIR and 

STTR programs, with other staff assisting as part of their duties; 

other agencies, however, have employees working part-time on the 

program. 

For this estimate, CBO assumes that the bill will be enacted before the end of fiscal year 2011 and that the necessary funds will 

be appropriated near the start of each year. Based on information 

from SBA and participating agencies, CBO estimates that implementing H.R. 1425 would cost $14 million over the 2012–2016 period, assuming appropriation of the necessary amounts. 

National Academy of Sciences study 

H.R. 1425 would direct certain agencies participating in the 

SBIR program to enter into an agreement with the NAS for the 

National Research Council to study the degree to which the SBIR 

and STTR programs have stimulated innovation and encouraged 

the use of small businesses to meet federal R&D needs. Reports 

presenting results of the studies would be due four years after enactment and every four years thereafter. Using those results, NAS 

also would develop recommendations for improving the SBIR and 

STTR programs. Based on information from NAS, CBO estimates 

that conducting the studies as required by H.R. 1425 would cost $7 

million over the 2012–2016 period. 

Additional agency activities 

H.R. 1425 would require SBA to upgrade the data systems used 

to consolidate information from participating agencies and evaluate 

their performance. The bill also would require SBA to develop new 

performance measures and regulations to reflect changes in the 

SBIR and STTR programs. Based on information from SBA, CBO 

estimates that those new efforts would cost $5 million over the 

2012–2016 period, assuming appropriation of the necessary 

amounts. 

The bill also would require GAO to conduct several studies for 

the Congress, including one to determine whether the agencies participating in the SBIR and STTR programs are complying with the 

programs’ requirements to allocate a specific portion of their R&D 

budgets and another to assess whether agencies participating in 


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the SBIR program are sufficiently protecting the intellectual property rights of the small businesses that receive awards under the 

program. CBO estimates that conducting such studies would cost 

about $2 million over the 2012–2016 period, subject to the availability of appropriated funds. 

Reauthorization and expansion of the SBIR and STTR programs 

The bill would extend both the SBIR and STTR programs 

through 2014. Under current law, both programs are scheduled to 

terminate on May 31, 2011, when a temporary reauthorization of 

all SBA programs expires. 

To cover the administrative costs of the programs, H.R. 1425 

would establish a three-year pilot program that would authorize 

participating agencies to use up to 3 percent of the R&D amounts 

set aside for the SBIR program, rather than paying those costs 

from general operating funds. The pilot program also would allow 

agencies to use R&D funds to provide outreach and technical assistance to recipients of awards and to carry out additional duties 

as required under the bill. CBO estimates that the amount allocated for administrative expenses under the pilot program would 

fully offset such costs incurred by participating agencies in 2012, 

2013, and 2014, when authorization for the programs would expire. 

Pay-As-You-Go considerations: None. 

Intergovernmental and private-sector impact: H.R. 1425 contains 

no intergovernmental or private-sector mandates as defined in 

UMRA. The bill would create a grant program to assist public universities in the commercialization of research and technology. Any 

costs to universities would be incurred voluntarily. 

Previous CBO estimate: On March 11, 2011, CBO transmitted a 

cost estimate for S. 493, the SBIR/STTR Reauthorization Act of 

2011, as ordered reported by the Senate Committee on Small Business and Entrepreneurship on March 9, 2011. The Senate bill 

would extend the programs through 2019 and raise the amounts 

that participating agencies would set aside for the SBIR and STTR 

programs. The Senate bill also would authorize funds for the Federal and State Technology Partnership Program. 

Estimate prepared by: Federal costs: Susan Willie and Martin 

von Gnechten; Impact on state, local, and tribal governments: Elizabeth Cove Delisle; Impact on the private sector: Sam Wice. 

Estimate approved by: Theresa Gullo, Deputy Assistant Director 

for Budget Analysis. 

XV. FEDERAL MANDATES STATEMENT

The Committee adopts as its own the estimate of Federal mandates prepared by the Director of the Congressional Budget Office 

pursuant to section 423 of the Unfunded Mandates Reform Act. 

XVI. ADVISORY COMMITTEE STATEMENT

No advisory committees within the meaning of section 5(b) of the 

Federal Advisory Committee Act were created by this legislation. 

XVII. APPLICABILITY TO LEGISLATIVE BRANCH

The Committee finds that the legislation does not relate to the 

terms and conditions of employment or access to public services or 


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accommodations within the meaning of section 102(b)(3) of the Congressional Accountability Act. 

XVIII. SECTION-BY-SECTION ANALYSIS

TITLE I—REAUTHORIZATION OF THE SBIR AND STTR PROGRAMS

Sec. 101. Extension length 

This section extends the SBIR and STTR programs for 3 years 

until September 30, 2014. 

Sec. 102. SBIR and STTR award levels 

This section increases the size of SBIR and STTR awards from 

$100,000 to $150,000 for Phase I and from $750,000 to $1 million 

for Phase II, and requires the SBA to make annual adjustments of 

the award sizes for inflation. The provision prohibits any agency 

from issuing an SBIR or STTR award if the size of the award exceeds the award guidelines established in this section by more than 

50 percent. Finally, the provision requires federal agencies to maintain information on awards exceeding the award guidelines; including the award amount; a justification for exceeding the guidelines; 

the identity and location of the recipient; and whether or not the 

recipient firm has received venture capital, hedge fund, or private 

equity firm investment, and if so, whether or not it is majority 

owned and controlled by one or more venture capital companies, 

hedge funds, or private equity firms. Nothing shall prevent a Federal agency from supplementing an award under the SBIR or STTR 

programs with Federal funds that are outside of the SBIR and 

STTR allocations. 

Sec. 103. Agency and program flexibility 

Section 103 allows SBIR and STTR applicants to receive awards 

for subsequent SBIR or STTR phases at another agency and also 

allows small business concerns which received SBIR or STTR 

awards to receive awards for subsequent phases in either the STTR 

or SBIR program, respectively. 

Sec. 104. Elimination of Phase II invitations 

This section requires that federal agencies conduct their solicitation of Phase II SBIR and STTR proposals without any invitation, 

pre-screening, pre-selection, or down-selection process between the 

first and second phase. 

Sec. 105. Phase flexibility 

This section grants agencies the ability to provide a Phase II 

Award if the Agency finds that the small business concern has already completed the work typically done during Phase I. 

Sec. 106 and Sec. 107. Participation by firms with substantial investment from multiple venture capital operating companies in 

a portion of the SBIR program 

Section 106 allows the Departments of Health and Human Services, and Energy, the National Aeronautics and Space Administration and the National Science Foundation to permit firms majority 

owned and controlled by one or more venture capital companies, 

one or more hedge funds, or one or more private equity firms to 


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49 

compete for up to 45 percent of the agency’s SBIR funds. All other 

qualifying federal agencies shall allow majority owned private investment backed small businesses to compete for up to 35 percent 

of the agency’s SBIR funds. Sec. 107 defines affiliations between 

various outside investors (such as venture capital companies, private equity firms, etc.) and small business concerns for purposes of 

determining whether the combination is eligible for an award 

under the SBIR program. 

Sec. 108. SBIR and STTR special acquisition preference 

This section codifies the language from the SBIR and STTR Policy Directives confirming the intent of Congress to establish a special acquisition preference for SBIR and STTR Phase III awards. 

The provision clarifies that preference for contracts concerning research developed with SBIR or STTR funds should go to the developers and holders of SBIR and STTR technologies to the greatest 

extent practicable. 

Sec. 109. Collaborating with federal laboratories and research and 

development centers 

Section 109 reduces the burden on cooperation between SBIR/ 

STTR firms and federal laboratories and/or federally funded research and development centers by ensuring that such subcontracting is generally permitted without the requirement for a waiver. The provision also ensures that subcontracting to federal laboratories is not required of SBIR or STTR awardees. Further, it 

clarifies that firms that have entered into a cooperative agreement 

with a federal laboratory are eligible to receive SBIR/STTR awards. 

The section also limits the required advance payment from a small 

business concern working with a federal laboratory or federally 

funded research and development center to 30 days for expenses. 

Sec. 110. Notice requirement 

This section ensures that the SBA is notified any time the SBIR 

or STTR policy directives are challenged in court. 

Sec. 111. Additional SBIR and STTR awards 

The section allows SBIR and STTR applicants to receive one sequential Phase II award for a single project. It also requires agencies to verify that any activity to be performed with respect to a 

project with a Phase I and Phase II award has not been funded 

from another Federal agency. 

TITLE II—COMMERCIALIZATION AND OUTREACH INITIATIVES

Sec. 201. Technical assistance for awardees 

This section increases the total amount of funds that a participating federal agency may use to contract with a vendor to provide 

technical assistance services for an individual SBIR or STTR award 

recipient from $4,000 to $5,000 for Phase I awards and from $4,000 

to $5,000 per year for Phase II awards, and extends the term of 

an allowable contract from three years to five years. The provision 

also states that this amount shall be in addition to the amount of 

the recipient’s award. It also requires agencies to provide SBIR and 

STTR award winners who wish to procure their own technical asVerDate Mar 15 2010 18:05 Jun 02, 2011 Jkt 099006 PO 00000 Frm 00049 Fmt 6659 Sfmt 6602 E:\HR\OC\HR090P1.XXX HR090P1

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sistance with the allowable amount. Further, the provision prohibits the agencies from using these funds to pay its contractor for 

technical assistance for a given SBIR or STTR award unless the 

contractor provides the technical assistance to that awardee. Finally, the provision prohibits a federal agency from entering into 

a contract with a vendor, under which the amount provided for 

technical assistance is based on the total number of Phase I or 

Phase II awards. 

Sec. 202. Commercialization Readiness Program at Department of 

Defense 

Section 202 extends the SBIR Commercialization Pilot Program 

(CPP) at the Department of Defense permanently and extends it to 

the department’s STTR program. It also changed the name to the 

Commercialization Readiness Program (CRP). The provision authorizes the Secretary of Defense to establish goals for 

transitioning Phase III technologies in subcontracting plans for 

contracts of $100 million or more. The provision also requires the 

Secretary of Defense to set a goal to increase the number of Phase 

II contracts that lead to technology transition into programs of 

record or fielded systems and to use incentives to encourage agency 

program managers and prime contractors to meet that goal. Finally, the provision includes reporting requirements on the status 

of projects funded through CRP. 

Sec. 203. Commercialization Readiness Pilot Program for civilian 

agencies 

This section authorizes agencies other than the Department of 

Defense to create Commercialization Readiness Pilot Programs 

(using no more than 10 percent of their program authorization) to 

support advanced development of small business technologies. The 

provision authorizes these agencies to grant post-Phase II awards 

up to two times the regular size (up to $3 million). The bill directs 

agencies making awards under this program to consider whether 

the technology to be supported by the award is likely to be manufactured in the United States. Authority to establish such a pilot 

program expires at the end of FY2014. 

Sec. 204. Interagency Policy Committee 

This section directs the Office of Science and Technology Policy 

to establish an SBIR/STTR Interagency Policy Committee to review 

and make policy recommendations on ways to improve the effectiveness and efficiency of the SBIR and STTR programs. 

Sec. 205. Clarifying definition of Phase III 

This section revises the definition of ‘‘Phase III’’ of the SBIR program so that it is clear that such work shall be directed toward 

commercial applications and derives from research and development completed in earlier phases. 

Sec. 206. Shortened period for final decisions on proposals and applications 

This section requires that not later than 90 days after, and if the 

Administrator authorizes an extension, then not later than 180 

days, from the date on which the solicitation closes for SBIR and 


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STTR programs, that the Administrator make a decision on each 

proposal submitted. The bill allows the Director of the National Institutes of Health (NIH) and the Director of the National Science 

Foundation (NSF) to make an award under the SBIR or STTR programs only if an application for award undergoes agency technical 

and scientific peer review. 

Sec. 207. Phase 0 Proof of Concept Partnership Pilot Program 

This section creates a three-year pilot program which terminates 

at the end of Fiscal Year 2014, under which the Director of the National Institutes of Health (NIH) shall use $10 million of the NIH 

STTR allocation to provide awards to qualifying universities and 

research institutions to set up ‘‘Proof of Concept Partnerships’’ to 

fund competitive grants of no more than $100,000 for researchers 

to support proof of concept work and commercialization mentoring. 

Qualifying institutions may be awarded up to $1,000,000 per year 

for up to 3 years. The NIH Director shall submit a report to the 

congressional committees of jurisdiction, evaluating the activities of 

the program. 

TITLE III—OVERSIGHT AND EVALUATION

Sec. 301. Streamlining annual evaluation requirements 

This section requires the Administration to report at least annually to Congress the number of proposals received from firms with 

venture capital, private equity, or hedge fund investment, including 

those owned and controlled by multiple venture capital, private equity, or hedge fund firms. It also requires the Administration to report on efforts to increase outreach to firms owned and controlled 

by women and socially or economically disadvantaged individuals, 

the implementation and compliance with the allocation of funds for 

firms majority owned and controlled by multiple venture capital, 

private equity or hedge fund companies, and appeals of Phase III 

awards and notices of noncompliance with the SBIR and the STTR 

Policy Directives. Finally, the section requires the Administration 

to coordinate the implementation of electronic databases at the participating agencies. 

Sec. 302. Data collection from agencies for SBIR 

This section requires agencies with an SBIR program to collect 

data annually on several issues including whether or not an applicant business or awardee: has venture capital, private equity or 

hedge fund investment, and if so the extent of that investment; is 

majority owned and controlled by multiple venture capital, private 

equity, or hedge fund firms; has foreign investors and who they 

are; is owned by a woman or has a woman as a principal investigator; is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual 

as a principal investigator; has a university affiliation; or is from 

a state receiving less SBIR funding for small businesses than a majority of other states. The provision also requires agencies to justify 

awards given that exceed the statuary guidelines. 


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Sec. 303. Data collection from agencies for STTR 

Section 303 requires agencies with an STTR program to collect 

data annually on several issues including whether or not an applicant business or awardee: has venture capital, private equity or 

hedge fund investment, and if so, the extent of that investment; is 

majority owned and controlled by multiple venture capital, private 

equity, or hedge fund firms; has foreign investors and who they 

are; is owned by a woman or has a woman as a principal investigator; is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual 

as a principal investigator; has a university affiliation; or is located 

in a state receiving less STTR funding than a majority of other 

states. The provision also requires agencies to justify awards given 

that exceed the statutory guidelines. 

Sec. 304. Public database 

This section requires that the public database maintained by the 

Administrator include information on whether or not a firm receiving an award: has venture capital, private equity or hedge fund investment; is majority owned and controlled by multiple venture 

capital, private equity, or hedge fund firms is owned by a woman 

or has a woman as a principal investigator; is owned by a socially 

or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator; or 

has a university affiliation. 

Sec. 305. Government database 

This section requires that the government database maintained 

by the Administrator in coordination with the agencies for the purposes of evaluating the SBIR and STTR programs and of preventing fraud, waste, and abuse shall contain the following: identifying information on the small business that has been awarded an 

SBIR or STTR award; information on the key individual that will 

carry out the SBIR or STTR project; information on the awarded 

project; information on the ownership structure and affiliations of 

awardee firms that have venture capital, private equity, or hedge 

fund investment, and that are majority owned and controlled by 

multiple venture capital, private equity, or hedge fund firms. This 

government database shall also contain: the names, titles, and contact information of the key individuals that will carry out the SBIR 

and STTR awarded project; 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 SBIR and STTR awards; and a list of any individual or small business concern that has been convicted of a 

fraud-related crime or has been found civilly liable for a fraud related violation under the SBIR or STTR program. 

Sec. 306. Accuracy in funding base calculations 

Section 306 requires the Comptroller General of the United 

States to conduct an audit of the SBIR and STTR programs to determine whether federal agencies are complying with the expenditure requirements. 


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Sec. 307. Continued evaluation by the National Academy of Sciences 

This section authorizes the National Academy of Sciences to continue its evaluation of the SBIR program through the end of fiscal 

year 2021 and requires that updates of the studies be provided to 

Congress every four years from the date of enactment. The bill requires the NRC to estimate the number of jobs created in the 

United States as a result of the SBIR and STTR programs. The bill 

also requires the NRC to conduct a comprehensive study of the 

STTR program to evaluate the effectiveness of the program in promoting collaborations between small businesses and research institutions, in transferring technology, and in commercializing technologies. The NRC shall also evaluate the economic effects of the 

program, the extent to which federal agencies are using Phase II 

award winners to fulfill their procurement needs, and the effectiveness of the current STTR allocation. 

Sec. 308. Technology insertion reporting requirements 

This section requires the Administration to include in its annual 

report to Congress information on Phase III awards issued by SBIR 

and STTR agencies, including the dollar amount of these awards, 

their recipients, and the name of the agency or the component of 

the agency issuing them. 

Sec. 309. Obtaining consent from SBIR and STTR applicants to release contact information to economic development organizations 

This section requires each Federal agency that conducts an SBIR 

or STTR program to enable small business concerns that are SBIR 

or STTR applicants to indicate whether that Federal agency has 

consent to identify the small business concern to local and Statelevel economic development organizations. 

Sec. 310. Pilot to allow funding for administrative, oversight, and 

contract processing costs 

Section 310 requires that the Administrator allow each Federal 

agency to not use more than 3 percent of the funds allocated to the 

SBIR programs for the first full three fiscal years beginning after 

the enactment of this subsection for costs relating to administration of the program; provision of outreach and technical assistance; 

implementation of commercialization and outreach initiatives; activities related to oversight and congressional reporting including 

waste, fraud, and abuse prevention activities; implementation of 

oversight and quality control measures; contract processing costs 

relating to the SBIR and STTR programs; and funding for additional personnel assistance with application reviews. Each Federal 

agency shall coordinate its activities to prevent waste, fraud, and 

abuse with its respective Inspector General, and each Federal 

agency that allocates more than $50 million to its SBIR program 

may share such funding with its Inspector General to carry out 

these activities. 

Sec. 311. GAO Study with Respect to Outside Investment Involvement 

This section requires that not later than 2 years after the date 

of the enactment of this Act, and every 2 years thereafter, the 


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Comptroller General of the United States conduct a study on the 

impact of requirements relating to venture capital operating company, private equity firm, and hedge fund involvement in the SBIR 

and STTR programs. 

Sec. 312. Reducing Vulnerability of SBIR and STTR Programs to 

Fraud, Waste, and Abuse 

This section requires the Administrator to, not later than 90 days 

after the enactment of this Act, amend the SBIR Policy Directive 

and the STTR Policy Directive to include measures to prevent 

fraud, waste, and abuse. This section: • Details guidelines for applicants, recipients, and Federal 

agencies to follow, allowing for more robust oversight and accountability in the program; • Requires the SBA Administrator to develop specific applicant certification requirements in cooperation with the Council 

on Inspectors General on Integrity and Efficiency and the Office of Advocacy at the Administration; • Provides suggested certification guidelines; • Requires that Inspectors General of participating SBIR/ 

STTR federal agencies cooperate to prevent fraud, waste, and 

abuse through coordination of activities and sharing of best 

practices; and 

• Requires that the Government Accountability Office conduct a study assessing the effectiveness of federal agencies in 

combating fraud, waste, and abuse. 

Sec. 313. Simplified Paperwork Requirements 

This section directs the SBA Administrator to issue regulations 

or guidelines to (the extent possible) standardize SBIR and STTR 

application paperwork. 

Sec. 314. Simplified Paperwork Requirements 

Section 314 directs Comptroller General to conduct a study of 

and make recommendations on the effectiveness of the government 

and public databases in reducing vulnerabilities of the SBIR and 

STTR programs to fraud, waste, and abuse. 

TITLE IV—POLICY DIRECTIVES

Sec. 401. Conforming amendments to the SBIR and the STTR Policy Directives 

This section requires conforming amendments to the SBA’s SBIR 

and STTR Policy Directives within 180 days to implement the provisions of this Act. It also requires that the Administration publish 

the SBIR and STTR Policy Directives in the Code of Federal Regulations within 180 days. 

TITLE V—OTHER PROVISIONS

Sec. 501. Report on SBIR and STTR program goals 

Section 501 directs each federal agency required to participate in 

an SBIR or STTR program to: (1) develop metrics in conjunction 

with the Interagency Policy Committee described in Sec. 204 to 

evaluate the effectiveness and benefit of such program; (2) conduct 

an annual evaluation of their program using such metrics; and (3) 


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report evaluation results annually to the Administrator and the 

relevant Congressional Committees. 

Sec. 502. Competitive selection procedures for SBIR and STTR programs 

This section requires all SBIR or STTR funds to be awarded pursuant to competitive and merit-based selection procedures. 

Sec. 503. SBA Regulations on loan restrictions 

Section 503 requires the SBA to develop regulations solely for 

purposes of the SBIR program that when or how restrictive covenants in loan agreements would constitute control for purposes of 

affiliation. 

Sec. 504. Program diversification 

This section requires federal agencies to encourage applications 

from small business concerns located in rural areas, areas underrepresented in SBIR and STTR programs, and areas with unemployment rates greater than the national average, as well as business concerns owned or controlled by women, veterans, and minorities. This section requires federal agencies to encourage applications from small business concerns owned and controlled by persons with disabilities. 

XIX. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, 

existing law in which no change is proposed is shown in roman): 

SMALL BUSINESS ACT 

* * * * * * * 

SEC. 3. (a) * * * 

* * * * * * * 

(aa) VENTURE CAPITAL OPERATING COMPANY.—In this Act, the 

term ‘‘venture capital operating company’’ means an entity described 

in clause (i), (v), or (vi) of section 121.103(b)(5) of title 13, Code of 

Federal Regulations (or any successor thereto). 

(bb) HEDGE FUND.—In this Act, the term ‘‘hedge fund’’ has the 

meaning given that term in section 13(h)(2) of the Bank Holding 

Company Act of 1956 (12 U.S.C. 1851(h)(2)). 

(cc) PRIVATE EQUITY FIRM.—In this Act, the term ‘‘private equity 

firm’’ has the meaning given the term ‘‘private equity fund’’ in section 13(h)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 

1851(h)(2)). 

* * * * * * * 

SEC. 9. (a) * * * 

(b) It shall be the duty of the Administration, and it is hereby 

empowered— 

(1) * * * 

* * * * * * * 


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(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 øSTTR programs, including the 

data¿ STTR programs, including— 

(A) the data on output and outcomes collected pursuant 

to subsections ø(g)(10), (o)(9), and (o)(15), the number of 

proposals received from, and the number and total amount 

of awards to, HUBZone small business concerns under 

each of the SBIR and STTR programs, and a description¿ 

(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 majorityowned 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 and social 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; and 

(F) 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); øand¿ 

(8) to provide for and fully implement the tenets of Executive 

Order No. 13329 (Encouraging Innovation in Manufacturing)ø.¿; and 

(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. 

* * * * * * * 

(e) For the purpose of this section— 

(1) * * * 

* * * * * * * 

(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) * * * 


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(B) a second phase, øto further¿ which shall not include 

any invitation, pre-screening, pre-selection, or down-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) * * * 

* * * * * * * 

(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) * * * 

(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 øscientific review 

criteria¿ merit-based selection procedures; 

* * * * * * * 

(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) * * * 

(B) a second phase, øto further develop proposed ideas 

to¿ which shall not include any invitation, pre-screening, 

pre-selection, or down-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) * * * 

* * * * * * * 

(8) the term ‘‘research institution’’ means a nonprofit institution, as defined in section 4(5) of the Stevenson-Wydler Technology Innovation Act of 1980, 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 35(c)(1) of the Office of Federal Procurement Policy Act (or any successor regulation thereto); øand¿ 

(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 


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in either øthe second or the third phase¿ Phase II or Phase III 

of the Small Business Innovation Research Program and of the 

Small Business Technology Transfer Program, as defined in 

this subsectionø.¿; 

(10) the term ‘‘commercialization’’ means— 

(A) the process of developing products, processes, technologies, or services; and 

(B) the production and delivery of products, processes, 

technologies, or services for sale (whether by the originating 

party or by others) 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); and 

(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). 

(f) FEDERAL AGENCY EXPENDITURES FOR THE SBIR PROGRAM.— 

(1) * * * 

(2) LIMITATIONS.—A Federal agency øshall not— 

ø(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¿ 

ø(B) make available for the purpose¿ shall not 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). 

[Effective on the first day of the fourth full fiscal year following the date of enactment, section 310(b)(3)(A) of H.R. 1425 provides for amendments to section 9(f)(2) 

of the Small Business Act as follows:] 

(2) LIMITATIONS.—A Federal agency øshall not make available for the purpose¿ 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). 

* * * * * * * 


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(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) * * * 

* * * * * * * 

(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 90 days after the date on which the solicitation closes; or 

(ii) if the Administrator authorizes an extension for a solicitation, not later than 180 days after the date on which 

the solicitation closes; 

* * * * * * * 

(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; 

(iv) is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator; 

(v) is a faculty member or a student of an institution 

of higher education, as that term is defined in section 

101 of the Higher Education Act of 1965 (20 U.S.C. 

1001); or 

(vi) is located in a State described in subsection 

(u)(3); and 

(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; 


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ø(8)¿ (9) make an annual report on the SBIR program to 

the Small Business Administration and the Office of Science 

and Technology Policy; 

ø(9)¿ (10) include, as part of its annual performance plan 

as required by subsections (a) and (b) of section 1115 of title 

31, United States Code, a section on its SBIR program, 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; 

ø(10) collect, and maintain in a common format in accordance with 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); 

and¿ 

(11) provide for and fully implement the tenets of Executive 

Order No. 13329 (Encouraging Innovation in Manufacturing)ø.¿; and 

(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. 

* * * * * * * 

(i) ANNUAL REPORTING.— 

(1) IN GENERAL.—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 (including awards under subsection (y)) pursuant to 

grants, contracts, or cooperative agreements over $10,000 in 

amount and the dollar value of all such awards, identifying 

SBIR awards and comparing the number and amount of such 

awards with awards to other than small business concerns. 

* * * * * * * 

(j)(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 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— 

(A) * * * 

(B) a simplified, standardized funding process which provides for (i) the timely receipt and review of proposals; (ii) outside peer review for at least øphase two¿ 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; 

* * * * * * * 


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(2) MODIFICATIONS.—Not later than 90 days after the date of 

enactment of the Small Business Research and Development 

Enhancement Act of 1992, the Administrator shall modify the 

policy directives issued pursuant to this subsection to provide 

for— 

(A) * * * 

(B) continued use by a small business concern participating in øthe third phase¿ Phase III of the SBIR program, as a directed bailment, of any property transferred 

by a Federal agency to the small business concern in øthe 

second phase¿ 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 øthe third phase¿ Phase III 

of such program; 

* * * * * * * 

(D) an increase to ø$100,000¿ $150,000 in the amount of 

funds which an agency may award in øthe first phase¿ 

Phase I of an SBIR program, and to ø$750,000¿ $1,000,000 

in øthe second phase¿ Phase II of an SBIR program, and 

an adjustment of such amounts øonce every 5 years to reflect economic adjustments and programmatic considerations¿ every year for inflation; 

* * * * * * * 

(F) enhanced outreach efforts to increase the participation of socially and economically disadvantaged small business concerns, as defined in section 8(a)(4), and the participation of small businesses that are 51 percent owned and 

controlled by women in technological innovation and in 

SBIR programs, including øthe third phase¿ 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 øthe first phase¿ Phase I of 

an SBIR program and the application for and extension of 

an award for øthe second phase¿ Phase II of such program; 

(H) procedures to ensure that a small business concern 

that submits a proposal for a funding agreement for øthe 

first phase¿ Phase I of an SBIR program and that has received more than 15 øsecond phase¿ Phase II SBIR awards 

during the preceding 5 fiscal years is able to demonstrate 

the extent to which it was able to secure øthird phase¿ 

Phase III funding to develop concepts resulting from previous øsecond phase¿ Phase II SBIR awards; and 

* * * * * * * 

(3) ADDITIONAL MODIFICATIONS.—Not later than 120 days 

after the date of the enactment of the Small Business Innovation Research Program Reauthorization Act of 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 øthe first phase (as described in 


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subsection (e)(4)(A))¿ Phase I, øthe second phase (as described in subsection (e)(4)(B))¿ Phase II, and øthe third 

phase (as described in subsection (e)(4)(C))¿ Phase III; 

(B) to provide for the requirement of a succinct commercialization plan with each application for a øsecond phase¿ 

Phase II award that is moving toward commercialization; 

* * * * * * * 

(k) DATABASE.— 

(1) PUBLIC DATABASE.—Not later than 180 days after the 

date of the enactment of the Small Business Innovation Research Program Reauthorization Act of 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 øfirst phase¿ Phase I or øsecond 

phase¿ Phase II SBIR or STTR award from a Federal 

agency; 

(B) a description of each øfirst phase¿ Phase I or øsecond 

phase¿ Phase II SBIR or STTR award received by that 

small business concern, including— 

(i) * * * 

* * * * * * * 

(D) information regarding mentors and Mentoring Networks, as required by section 35(d); øand¿ 

(E) with respect to assistance under the STTR program 

only— 

(i) * * * 

* * * * * * * 

(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 

institutionø.¿; and 

(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; 

(iii) is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator; or 

(iv) is owned by a faculty member or a student of an 

institution of higher education, as that term is defined 

in section 101 of the Higher Education Act of 1965 (20 

U.S.C. 1001). 


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(2) GOVERNMENT DATABASE.—øNot later than 180 days after 

the date of the enactment of the Small Business Innovation 

Research Program Reauthorization Act of 2000¿ Not later than 

90 days after the date of enactment of the Creating Jobs 

Through Small Business Innovation Act of 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, and an identifying 

number assigned by the Administration of the small 

business concern; 

(ii) an abstract of the 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 (iv) will contribute to the project; 

(vii) whether the small business concern is majorityowned 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; 

ø(A)¿ (B) contains for each øsecond phase¿ Phase II 

award made by a Federal agency— 

(i) * * * 

(ii) information collected in accordance with paragraph (3) on additional investment from any source, 

other than øfirst phase¿ Phase I or øsecond phase¿ 

Phase II SBIR or STTR awards, to further the research and development conducted under the award; 

and 

* * * * * * * 

ø(B)¿ (C) includes any narrative information that a 

small business concern receiving a øsecond phase¿ Phase 

II award voluntarily submits to further describe the outputs and outcomes of its awards; 

ø(C) includes for each applicant for a first phase or second phase award that does not receive such an award— 

ø(i) the name, size, and location, and an identifying 

number assigned by the Administration; 

ø(ii) an abstract of the project; and 


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ø(iii) the Federal agency to which the application 

was made;¿ 

(D) includes, for each awardee— 

(i) the name, size, location, and any identifying number assigned to the awardee by the Administrator; 

(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 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; 

ø(D)¿ (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; øand¿ 

ø(E)¿ (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 databaseø.¿; 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.—A small business concern applying for 

a øsecond phase¿ Phase II award under this section shall 

be required to update information in the database estabVerDate Mar 15 2010 18:05 Jun 02, 2011 Jkt 099006 PO 00000 Frm 00064 Fmt 6659 Sfmt 6601 E:\HR\OC\HR090P1.XXX HR090P1

sroberts on DSK5SPTVN1PROD with HEARING
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lished under this subsection for any prior øsecond phase¿ 

Phase II award received by that small business concern. In 

complying with this paragraph, a small business concern 

may apportion sales or additional investment information 

relating to more than one øsecond phase¿ Phase II award 

among those awards, if it notes the apportionment for each 

award. 

(B) ANNUAL UPDATES UPON TERMINATION.—A small business concern receiving a øsecond phase¿ Phase II award 

under this section shall— 

(i) * * * 

* * * * * * * 

(C) GOVERNMENT DATABASE.—Not later than 60 days 

after the date established by a Federal agency for submitting applications or proposals for a Phase I or Phase II 

award under the SBIR program or STTR program, the 

head of the Federal agency shall submit to the Administrator the data required under paragraph (2) with respect 

to each small business concern that applies or submits a 

proposal for the Phase I or Phase II award. 

* * * * * * * 

(l) REPORTING OF AWARDS MADE FROM SINGLE PROPOSAL, TO

MULTIPLE AWARD WINNERS, OR TO CRITICAL TECHNOLOGY TOP- ICS.— (1) * * * 

(2) MULTIPLE AWARDS.—An agency referred to in paragraph 

(1) shall include in its next annual report required under subsection (g)(8) an accounting of the awards the agency has made 

for øthe first phase¿ Phase I of an SBIR program during the 

reporting period to entities that have received more than 15 

awards for øthe second phase¿ Phase II of an SBIR program 

during the preceding 5 fiscal years. 

* * * * * * * 

(m) øTERMINATION.— ø(1) IN GENERAL.—Except as provided in paragraph (2), the 

authorization¿ TERMINATION.—The authorization to carry out 

the Small Business Innovation Research Program established under this section 

shall terminate on September 30, ø2008¿ 2014. ø(2) EXCEPTION FOR DEPARTMENT OF DEFENSE.—The Secretary of Defense and the Secretary of each military department are authorized to carry out the Small Business Innovation Research Program of the Department of Defense until 

September 30, 2010¿ 

(n) REQUIRED EXPENDITURES FOR STTR BY FEDERAL AGENCIES.— 

(1) REQUIRED EXPENDITURE AMOUNTS.— 

(A) øIN GENERAL.— 

ø(i) FEDERAL AGENCIES GENERALLY.—Except as provided in clause (ii), with respect¿ IN GENERAL.—With 

respect to each fiscal year through fiscal year ø2009¿ 

2014, each Federal agency that has an extramural 

budget for research, or research and development, in 

excess of $1,000,000,000 for that fiscal year, shall expend with small business concerns not less than the 


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percentage of that extramural budget specified in subparagraph (B), specifically in connection with STTR 

programs that meet the requirements of this section 

and any policy directives and regulations issued under 

this section. 

ø(ii) DEPARTMENT OF DEFENSE.—The Secretary of 

Defense and the Secretary of each military department shall carry out clause (i) with respect to each fiscal year through fiscal year 2010.¿ 

* * * * * * * 

(o) FEDERAL AGENCY STTR AUTHORITY.—Each Federal agency 

required to establish an STTR program in accordance with subsection (n) and regulations issued under this Act, shall— 

(1) * * * 

* * * * * * * 

(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 90 days after the date on which the solicitation closes; or 

(ii) if the Administrator authorizes an extension for a solicitation, not later than 180 days after the date on which 

the solicitation closes; 

* * * * * * * 

ø(9) collect such data from awardees as is necessary to assess STTR program outputs and outcomes;¿ 

(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 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 


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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; 

(iv) is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator; 

(v) is a faculty member or a student of an institution 

of higher education, as that term is defined in section 

101 of the Higher Education Act of 1965 (20 U.S.C. 

1001); 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; and 

(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; 

* * * * * * * 

(13) not later than July 31, 1993, develop procedures for assessing the commercial merit and feasibility of STTR proposals, as evidenced by— 

(A) * * * 

(B) the existence of øsecond phase¿ Phase II funding 

commitments from private sector or non-STTR funding 

sources; 

(C) the existence of øthird phase¿ Phase III follow-on 

commitments for the subject of the research; and 

* * * * * * * 

ø(15) collect, and maintain in a common format in accordance with subsection (v), such information from awardees as is 

necessary to assess the STTR program, including information 

necessary to maintain the database described in subsection (k); 

and¿ 

ø(16)¿ (15) provide for and fully implement the tenets of 

Executive Order No. 13329 (Encouraging Innovation in Manufacturing)ø.¿; and 

(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. 

(p) STTR POLICY DIRECTIVE.— 

(1) * * * 

(2) CONTENTS.—The policy directive required by paragraph 

(1) shall provide for— 

(A) * * * 

(B) a simplified, standardized funding process that provides for— 

(i) * * * 

* * * * * * * 


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(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 øthe 

second phase¿ 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 øthe third phase¿ 

Phase III of such program; 

* * * * * * * 

(ix) 1-year awards for øthe first phase¿ Phase I of an 

STTR program, generally not to exceed ø$100,000¿ 

$150,000, and 2-year awards for øthe second phase¿ 

Phase II of an STTR program, generally not to exceed 

ø$750,000¿ $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; 

* * * * * * * 

(3) MODIFICATIONS.—Not later than 120 days after the date 

of enactment of this paragraph, the Administrator shall modify 

the policy directive issued pursuant to this subsection to clarify 

that the rights provided for under paragraph (2)(B)(v) apply to 

all Federal funding awards under this section, including øthe 

first phase (as described in subsection (e)(6)(A))¿ Phase I, øthe 

second phase (as described in subsection (e)(6)(B))¿ Phase II, 

and øthe third phase (as described in subsection (e)(6)(C))¿ 

Phase III. 

(q) DISCRETIONARY TECHNICAL ASSISTANCE.— 

(1) IN GENERAL.—Each Federal agency required by this section to conduct an SBIR program or STTR program may enter 

into an agreement with a vendor selected under paragraph (2) 

to provide small business concerns engaged in øSBIR projects¿ 

SBIR or STTR projects with technical assistance services, such 

as access to a network of scientists and engineers engaged in 

a wide range of technologies, or access to technical and business literature available through on-line data bases, for the 

purpose of assisting such concerns in— 

(A) * * * 

* * * * * * * 

(2) VENDOR SELECTION.—Each agency may select a vendor to 

assist small business concerns to meet the goals listed in paragraph (1) for a term not to exceed ø3 years¿ 5 years. Such selection shall be competitive and shall utilize merit-based criteria. 

(3) ADDITIONAL TECHNICAL ASSISTANCE.— (A) øFIRST PHASE¿ PHASE I.—Each agency referred to in 

paragraph (1) may provide services described in paragraph 

(1) to øfirst phase¿ Phase I SBIR or STTR award recipients in an amount equal to not more than ø$4,000¿ 

$5,000, which shall be in addition to the amount of the recipient’s award. 


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ø(B) SECOND PHASE.—Each agency referred to in paragraph (1) may authorize any second phase SBIR award recipient to purchase, with funds available from their SBIR 

awards, services described in paragraph (1), in an amount 

equal to not more than $4,000 per year.¿ 

(B) PHASE II.—A Federal agency described in paragraph 

(1) may— 

(i) provide to the recipient of a Phase II SBIR or 

STTR award, through a vendor selected under paragraph (2), the services described in paragraph (1), in 

an amount equal to not more than $5,000 per year; or 

(ii) authorize the recipient of a Phase II SBIR or 

STTR award to purchase the services described in 

paragraph (1), in an amount equal to not more than 

$5,000 per year, which shall be in addition to the 

amount of the recipient’s award. 

(C) FLEXIBILITY.—In carrying out subparagraphs (A) and 

(B), each Federal agency shall provide the allowable 

amounts to a recipient that meets the eligibility requirements under the applicable subparagraph, if the recipient 

requests to seek technical assistance from an individual or 

entity other than the vendor selected under paragraph (2) 

by the Federal agency. 

(D) LIMITATION.—A Federal agency may not— 

(i) use the amounts authorized under subparagraph 

(A) or (B) unless the vendor selected under paragraph 

(2) provides the technical assistance to the recipient; or 

(ii) enter a contract with a vendor under paragraph 

(2) under which the amount provided for technical assistance is based on total number of Phase I or Phase 

II awards. 

(r) øTHIRD PHASE¿ PHASE III AGREEMENTS.— 

(1) IN GENERAL.—In the case of a small business concern 

that is awarded a funding agreement øfor the second phase¿ 

for Phase II of an SBIR or STTR program, a Federal agency 

may enter into a øthird phase¿ Phase III agreement with that 

business concern for additional work to be performed during or 

after the øsecond phase period¿ Phase II period. The øsecond 

phase¿ Phase II funding agreement with the small business 

concern may, at the discretion of the agency awarding the 

agreement, set out the procedures applicable to øthird phase¿ 

Phase III agreements with that agency or any other agency. 

(2) DEFINITION.—In this subsection, the term ‘‘øthird phase¿ 

Phase III agreement’’ means a follow-on, non-SBIR or nonSTTR funded contract as described in paragraph (4)(C) or 

paragraph (6)(C) of subsection (e). 

* * * * * * * 

(4) PHASE III AWARDS.—To the greatest extent practicable, 

Federal agencies and Federal prime contractors shall issue 

Phase III awards relating to technology, including sole source 

awards, to the SBIR and STTR award recipients that developed the technology. 

* * * * * * * 

(u) COORDINATION OF TECHNOLOGY DEVELOPMENT PROGRAMS.— 


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(1) * * * 

(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) * * * 

(B) any proposal for øthe first phase¿ 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) * * * 

* * * * * * * 

(v) øSIMPLIFIED REPORTING REQUIREMENTS.—The Administrator¿ 

REDUCING PAPERWORK AND COMPLIANCE BURDEN.— 

(1) STANDARDIZATION OF REPORTING REQUIREMENTS.—The 

Administrator shall work with the Federal agencies required 

by this section to have an SBIR or STTR program to standardize reporting requirements for the collection of data from 

SBIR or STTR applicants and awardees, including data for inclusion in the database under subsection (k), taking into consideration the unique needs of each agency, and to the extent 

possible, permitting the updating of previously reported information by electronic means. Such requirements shall be designed to minimize the burden on small businesses. 

(2) SIMPLIFICATION OF APPLICATION AND AWARD PROCESS.— Not later than one year after the date of enactment of this paragraph, and after a period of public comment, the Administrator 

shall issue regulations or guidelines, taking into consideration 

the unique needs of each Federal agency, to ensure that each 

Federal agency required to carry out an SBIR program or 

STTR program simplifies and standardizes the program proposal, selection, contracting, compliance, and audit procedures 

for the SBIR program or STTR program of the Federal agency 

(including procedures relating to overhead rates for applicants 

and documentation requirements) to reduce the paperwork and 

regulatory compliance burden on small business concerns applying to and participating in the SBIR program or STTR program. 

* * * * * * * 

(y) COMMERCIALIZATION øPILOT¿ READINESS PROGRAM.— (1) IN GENERAL.—The Secretary of Defense and the Secretary 

of each military department is authorized to create and administer a ‘‘Commercialization øPilot¿ Readiness Program’’ to accelerate the transition of technologies, products, and services 

developed under the Small Business Innovation Research Program or Small Business Technology Transfer Program to Phase 

III, including the acquisition process. The authority to create 

and administer a Commercialization Readiness Program under 

this subsection may not be construed to eliminate or replace any 

other SBIR program or STTR program that enhances the insertion or transition of SBIR or STTR technologies, including any 

such program in effect on the date of enactment of the National 


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Defense Authorization Act for Fiscal Year 2006 (Public Law 

109–163; 119 Stat. 3136). 

(2) IDENTIFICATION OF RESEARCH PROGRAMS FOR ACCELER- ATED TRANSITION TO ACQUISITION PROCESS.—In carrying out 

the Commercialization øPilot¿ Readiness Program, the Secretary of Defense and the Secretary of each military department shall identify research programs of the Small Business 

Innovation Research Program or Small Business Technology 

Transfer Program that have the potential for rapid 

transitioning to Phase III and into the acquisition process. 

* * * * * * * 

ø(4) FUNDING.—For payment of expenses incurred to administer the Commercialization Pilot Program under this subsection, the Secretary of Defense and each Secretary of a military department is authorized to use not more than an amount 

equal to 1 percent of the funds available to the Department of 

Defense or the military department pursuant to the Small 

Business Innovation Research Program. Such funds— 

ø(A) shall not be subject to the limitations on the use of 

funds in subsection (f)(2); and 

ø(B) shall not be used to make Phase III awards. 

ø(5) EVALUATIVE REPORT.—At the end of each fiscal year, the 

Secretary of Defense shall submit to the Committee on Armed 

Services and the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Armed Services 

and the Committee on Small Business of the House of Representatives an evaluative report regarding activities under the 

Commercialization Pilot Program. The report shall include— 

ø(A) an accounting of the funds used in the Commercialization Pilot Program; 

ø(B) a detailed description of the Commercialization 

Pilot Program, including incentives and activities undertaken by acquisition program managers, program executive officers, and prime contractors; and 

ø(C) a detailed compilation of results achieved by the 

Commercialization Pilot Program, including the number of 

small business concerns assisted and the number of 

projects commercialized. 

ø(6) SUNSET.—The pilot program under this subsection shall 

terminate at the end of fiscal year 2010.¿ 

(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 that Secretary that lead to technology transition into programs of record or fielded systems; 


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(B) use incentives in effect on the date of enactment of the 

Creating Jobs Through Small Business Innovation Act of 

2011, or create new incentives, to encourage agency program managers and prime contractors to meet the goal 

under subparagraph (A); and 

(C) include in the annual report to Congress the percentage of contracts described in subparagraph (A) awarded by 

that Secretary, and information on the ongoing status of 

projects funded through the Commercialization Readiness 

Program and efforts to transition these technologies into 

programs of record or fielded systems. 

[Effective on the first day of the fourth full fiscal year following the date of enactment, section 310(b)(3)(B) of H.R. 1425 provides for amendments to section 9(y) 

of the Small Business Act by inserting a paragraph (4) after paragraph (3) and 

redesignating paragraphs (4) and (5) as paragraphs (5) and (6), respectively, and 

reads as follows:] 

(4) FUNDING.— 

(A) IN GENERAL.—The Secretary of Defense and each Secretary of a military department may use not more than an 

amount equal to 1 percent of the funds available to the Department of Defense or the military department pursuant to 

the Small Business Innovation Research Program for payment of expenses incurred to administer the Commercialization Pilot Program under this subsection. 

(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. 

ø(4)¿ (5) INSERTION INCENTIVES.—For any contract with a 

value of not less than $100,000,000, the Secretary of Defense 

is authorized to— 

(A) * * * 

* * * * * * * 

ø(5)¿ (6) GOAL FOR SBIR AND STTR TECHNOLOGY INSERTION.— 

The Secretary of Defense shall— 

(A) * * * 

* * * * * * * 

(aa) LIMITATION ON SIZE OF AWARDS.— 

(1) LIMITATION.—No Federal agency may issue an award 

under the SBIR program or the STTR program if the size of the 

award exceeds the award guidelines established under this section by more than 50 percent. 

(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 award amount; 

(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 


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venture capital operating companies, hedge funds, or private equity firms. 

(3) REPORTS.—The Administrator shall include the information described in paragraph (2) in the annual report of the Administrator to Congress. 

(4) RULE OF CONSTRUCTION.—Nothing in this subsection 

shall be construed to prevent a Federal agency from 

supplementing an award under the SBIR program or the STTR 

program using funds of the Federal agency that are not part of 

the SBIR program or the STTR program of the Federal agency. 

(bb) SUBSEQUENT PHASE II AWARDS.— 

(1) AGENCY FLEXIBILITY.—A small business concern that received a Phase I award from a Federal agency under this section shall be eligible to receive a subsequent Phase II award 

from another Federal agency, if the head of each relevant Federal agency or the relevant component of the Federal agency 

makes a written determination that the topics of the relevant 

awards are the same and both agencies report the awards to the 

Administrator for inclusion in the public database under subsection (k). 

(2) SBIR AND STTR PROGRAM FLEXIBILITY.—A small business 

concern that received a Phase I award under this section under 

the SBIR program or the STTR program may receive a subsequent Phase II award in either the SBIR program or the STTR 

program and the participating agency or agencies shall report 

the awards to the Administrator for inclusion in the public 

database under subsection (k). 

(cc) PHASE I REQUIRED.—Under this section, a Federal agency 

shall provide to a small business concern an award under Phase II 

of an SBIR program with respect to a project only if such agency 

finds that the small business concern has been provided an award 

under Phase I of an SBIR program with respect to such project or 

has completed the determinations described in subsection (e)(4)(A) 

with respect to such project despite not having been provided a 

Phase I award. 

(dd) PARTICIPATION OF SMALL BUSINESS CONCERNS MAJORITYOWNED BY VENTURE CAPITAL OPERATING COMPANIES, HEDGE

FUNDS, OR PRIVATE EQUITY FIRMS IN THE SBIR PROGRAM.— 

(1) AUTHORITY.—Upon a written determination described in 

paragraph (2) provided 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 an award is made— 

(A) the Director of the National Institutes of Health, the 

Secretary of Energy, the Administrator of the National Aeronautics and Space Administration, and the Director of the 

National Science Foundation may award not more than 45 

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; and 


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(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 35 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 the SBIR project. 

(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.—The head of a Federal agency that 

makes an award under this subsection during a fiscal year 

shall collect and submit to the Administrator data relating 

to the number and dollar amount of Phase I awards, Phase 

II awards, and any other category of awards by the Federal 

agency under the SBIR program during that fiscal year. 

(B) ANNUAL REPORTING.—The Administrator shall include as part of each annual report by the Administration 

under subsection (b)(7) any data submitted under subparagraph (A) and a discussion of the compliance of each Federal agency that makes an award under this subsection 

during the fiscal year with the maximum percentages 

under paragraph (1). 

(5) ENFORCEMENT.—If a Federal agency awards more than 

the percent of the funds allocated for the SBIR program of the 

Federal agency authorized under paragraph (1) for a purpose 

described in paragraph (1), the head of the Federal agency shall 

transfer an amount equal to the amount awarded in excess of 

the amount authorized under paragraph (1) 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 180 days after the date on which the Federal agency made 

the award that caused the total awarded under paragraph (1) 


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to be more than the amount authorized under paragraph (1) for 

a purpose described in paragraph (1). 

(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.—A Federal agency may not use investment of venture capital or investment from hedge funds or 

private equity firms as a criterion for the award of contracts 

under the SBIR program or STTR program. 

(ee) VENTURE CAPITAL OPERATING COMPANIES, HEDGE FUNDS, 

AND PRIVATE EQUITY FIRMS.—Effective only for the SBIR and 

STTR programs the following shall apply: 

(1) A business concern that has more than 500 employees 

shall not qualify as a small business concern. 

(2) In determining whether a small business concern is independently owned and operated under section 3(a)(1) or meets 

the small business size standards instituted under section 

3(a)(2), the Administrator shall not consider a business concern 

to be affiliated with a venture capital operating company, hedge 

fund, or private equity firm (or with any other business that the 

venture capital operating company, hedge fund, or private equity firm has financed) if— 


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(A) the venture capital operating company, hedge fund, or 

private equity firm does not own 50 percent or more of the 

business concern; and 

(B) employees of the venture capital operating company, 

hedge fund, or private equity firm do not constitute a majority of the board of directors of the business concern. 

(3) A business concern shall be deemed to be ‘‘independently 

owned and operated’’ if— 

(A) it is owned in majority part by one or more natural 

persons or venture capital operating companies, hedge 

funds, or private equity firms; 

(B) there is no single venture capital operating company, 

hedge fund, or private equity firm that owns 50 percent or 

more of the business concern; and 

(C) there is no single venture capital operating company, 

hedge fund, or private equity firm the employees of which 

constitute a majority of the board of directors of the business concern. 

(4) If a venture capital operating company, hedge fund, or 

private equity firm controlled by a business with more than 500 

employees (in this paragraph referred to as a ‘‘VCOC, hedge 

fund, or private equity firm under large business control’’) has 

an ownership interest in a small business concern that is owned 

in majority part by venture capital operating companies, hedge 

funds, or private equity firms, the small business concern is eligible to receive an award under the SBIR or STTR program 

only if— 

(A) not more than two VCOCs, hedge funds, or private 

equity firms under large business control have an ownership interest in the small business concern; and 

(B) the VCOCs, hedge funds, or private equity firms 

under large business control do not collectively own more 

than 20 percent of the small business concern. 

(ff) 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 12(d) of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 

3710a(d))) 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 a SBIR or STTR award and a Federal labVerDate Mar 15 2010 18:05 Jun 02, 2011 Jkt 099006 PO 00000 Frm 00076 Fmt 6659 Sfmt 6603 E:\HR\OC\HR090P1.XXX HR090P1

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oratory 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 the date 

of enactment of this subsection, 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 and 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.—If a small business concern receiving 

an award under this section enters 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, the Federal laboratory or federally funded research 

and development center may not require advance payment from 

the small business concern in an amount greater than the 

amount necessary to pay for 30 days of such activities. 

(gg) ADDITIONAL SBIR AND STTR AWARDS.— (1) EXPRESS AUTHORITY FOR AWARDING A SEQUENTIAL PHASE

II AWARD.—A small business concern that receives a Phase II 

SBIR award or a Phase II STTR award for a project remains 

eligible to receive one additional Phase II SBIR award or Phase 

II STTR award for continued work on that project. 

(2) PREVENTING DUPLICATIVE AWARDS.—The head of a Federal agency shall verify that any activity to be performed with 

respect to a project with a Phase I or Phase II SBIR or STTR 

award has not been funded under the SBIR program or STTR 

program of another Federal agency. 

(hh) 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.—A covered Federal agency may not establish a pilot program unless the covered Federal agency 

makes a written application to the Administrator, not later 

than 90 days before the first day of the fiscal year in which 

the pilot program is to be established, that describes a comVerDate Mar 15 2010 18:05 Jun 02, 2011 Jkt 099006 PO 00000 Frm 00077 Fmt 6659 Sfmt 6603 E:\HR\OC\HR090P1.XXX HR090P1

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pelling reason that additional investment in SBIR or STTR 

technologies is necessary, including unusually high regulatory, systems integration, or other costs relating to development or manufacturing of identifiable, highly promising 

small business technologies or a class of such technologies 

expected to substantially advance the mission of the agency. 

(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.—The head of a covered 

Federal agency may not make an award under a pilot program 

in excess of 3 times the dollar amounts generally established for 

Phase II awards under subsection (j)(2)(D) or (p)(2)(B)(ix). 

(4) REGISTRATION.—Any applicant that receives an award 

under a pilot program shall register with the Administrator in 

a registry that is available to the public. 

(5) AWARD CRITERIA OR CONSIDERATION.—When making an 

award under this section, the head of a covered Federal agency 

shall give consideration to whether the technology to be supported by the award is likely to be manufactured in the United 

States. 

(6) REPORT.—The head of each covered Federal agency shall 

include in the annual report of the covered Federal agency to 

the Administrator an analysis of the various activities considered for inclusion in the pilot program of the covered Federal 

agency and a statement of the reasons why each activity considered was included or not included, as the case may be. 

(7) TERMINATION.—The authority to establish a pilot program 

under this section expires at the end of fiscal year 2014. 

(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 the program established under paragraph (1). 

(ii) NIH PEER REVIEW PROCESS.—Notwithstanding subsections 

(g)(4)(B) and (o)(4)(B), the Director of the National Institutes of 

Health may make an award under the SBIR program or the STTR 

program of the National Institutes of Health only if the application 

for the award has undergone technical and scientific peer review 

under section 492 of the Public Health Service Act (42 U.S.C. 289a). 

(jj) NSF PEER REVIEW PROCESS.—Notwithstanding subsections 

(g)(4)(B) and (o)(4)(B), the Director of the National Science Foundation may make an award under the SBIR program or the STTR 


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program of the National Science Foundation only if the application 

for the award has undergone the National Science Foundation’s 

technical and scientific peer review process and met all other applicable peer review procedures and guidelines pursuant to the National Science Foundation Act of 1950 (42 U.S.C. 1861, et seq.) and 

other applicable Federal law. 

(kk) PHASE 0 PROOF OF CONCEPT PARTNERSHIP PILOT PRO- GRAM.— 

(1) IN GENERAL.—The Director of the National Institutes of Health shall use $10,000,000 of the funds allocated under subsection (n)(1) for a Proof of Concept Partnership pilot program 

to accelerate the creation of small businesses and the commercialization of research innovations from qualifying institutions. 

To implement this program, the Director shall award, through 

a competitive, merit-based process, grants to qualifying institutions. These grants shall only be used to administer Proof of 

Concept Partnership awards in conformity with this subsection. 

(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.—A Proof of Concept Partnership shall 

be set up by a qualifying institution to award grants to individual researchers. These grants should provide researchers with the initial investment and the resources to support 

the proof of concept work and commercialization mentoring 

needed to translate promising research projects and technologies into a viable company. This work may include 

technical validations, market research, clarifying intellectual property rights position and strategy and investigating 

commercial or business opportunities. 

(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. 


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(C) EDUCATIONAL RESOURCES AND GUIDANCE.—The administrator of a Proof of Concept Partnership program 

shall make educational resources and guidance available to 

researchers attempting to commercialize their innovations. 

(4) AWARDS.— (A) SIZE OF AWARD.—The Director may make awards to a qualifying institution for up to $1,000,000 per year for up 

to 3 years. 

(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 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, 


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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.—The pilot program under this subsection shall 

terminate at the end of fiscal year 2014. 

(ll) 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 made by the Federal agency— 

(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. 

(mm) CONSENT TO RELEASE CONTACT INFORMATION TO ORGANI- ZATIONS.— 

(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 Statelevel 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.—The Administrator shall establish rules to implement this subsection. The rules shall include a requirement that 

a Federal agency include in the SBIR and STTR application a 

provision through which the applicant can indicate consent for 

purposes of paragraph (1). 

(nn) ASSISTANCE FOR ADMINISTRATIVE, OVERSIGHT, AND CON- TRACT PROCESSING COSTS.— 

(1) IN GENERAL.—Subject to paragraph (2), for the 3 full fiscal years beginning after the date of enactment of this subsection, 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 and 

personnel interviews; 

(C) the implementation of commercialization and outreach initiatives that were not in effect on the date of enactment of this subsection; 

(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 


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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) carrying out subsection (hh); 

(J) contract processing costs relating to the SBIR program or STTR program of the Federal agency; and 

(K) funding for additional personnel and assistance with 

application reviews. 

(2) PERFORMANCE CRITERIA.—A Federal agency may not use 

funds as authorized under paragraph (1) until after the effective date of performance criteria, which the Administrator shall 

establish, to measure any benefits of using funds as authorized 

under paragraph (1) and to assess continuation of the authority 

under paragraph (1). 

(3) RULES.—Not later than 180 days after the date of enactment of this subsection, the Administrator shall issue rules to 

carry out this subsection. 

(4) COORDINATION WITH IG.—Each Federal agency shall coordinate the activities funded under subparagraph (E), (F), or 

(G) of paragraph (1) with their respective Inspectors General, 

when appropriate, and each Federal agency that allocates more 

than $50,000,000 to the SBIR program of the Federal agency 

for a fiscal year may share such funding with its Inspector General when the Inspector General performs such activities. 

(oo) 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.—The head of each Federal agency described in paragraph (1) shall submit to the appropriate 

committees of Congress and the Administrator an annual 

report describing in detail the results of an evaluation conducted under paragraph (2). 


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(B) PUBLIC AVAILABILITY OF REPORT.—The head of each 

Federal agency described in paragraph (1) shall make each 

report submitted under subparagraph (A) available to the 

public online. 

(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. 

(pp) COMPETITIVE SELECTION PROCEDURES FOR SBIR AND STTR 

PROGRAMS.—All funds awarded, appropriated, or otherwise made 

available in accordance with subsection (f) or (n) must be awarded 

pursuant to competitive and merit-based selection procedures. 

* * * * * * * 

SECTION 108 OF THE SMALL BUSINESS 

REAUTHORIZATION ACT OF 2000 

SEC. 108 NATIONAL RESEARCH COUNCIL REPORTS. 

(a) * * * 

* * * * * * * 

(e) EXTENSIONS AND ENHANCEMENTS OF AUTHORITY.— 

(1) IN GENERAL.—Not later than 6 months after the date of 

enactment of the Creating Jobs Through Small Business Innovation Act of 2011, the head of each agency described in subsection (a), in consultation with the Small Business Administration, shall cooperatively enter into an agreement with the 

National Academy of Sciences for the National Research Council to, not later than 4 years after the date of enactment of the 

Creating Jobs Through Small Business Innovation Act of 2011, 

and every 4 years thereafter— 

(A) continue the most recent study under this section relating to the issues described in subparagraphs (A), (B), 

(C), and (E) of subsection (a)(1); 

(B) conduct a comprehensive study of how the STTR program has stimulated technological innovation and technology transfer, including— 

(i) a review of the collaborations created between 

small businesses and research institutions, including 

an evaluation of the effectiveness of the program in 

stimulating new collaborations and any obstacles that 

may prevent or inhibit the creation of such collaborations; 

(ii) an evaluation of the effectiveness of the program 

at transferring technology and capabilities developed 

through Federal funding; 

(iii) an evaluation of the program’s success at commercializing technologies compared with other Federal 

technology transfer programs and the SBIR program; 


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(iv) to the extent practicable, an evaluation of the economic benefits achieved by the STTR program, including the economic rate of return; 

(v) an analysis of how Federal agencies are using 

small businesses that have completed Phase II under 

the STTR program to fulfill their procurement needs; 

and 

(vi) an analysis of whether the existing STTR allocation has impacted the effectiveness of the program in 

achieving its goals; 

(C) make recommendations with respect to the issues described in subparagraph (A), (D), and (E) of subsection 

(a)(2) and subparagraph (B) of this paragraph; and 

(D) estimate, to the extent practicable, the number of jobs 

created by the SBIR program or STTR program of the 

agency. 

(2) CONSULTATION.—An agreement under paragraph (1) shall 

require the National Research Council to ensure that there is 

participation by and consultation with the small business community, the Administration, and other interested parties as described in subsection (b). 

(3) REPORTING.—An agreement under paragraph (1) shall require that— 

(A) not later than 4 years after the date of enactment of 

the Creating Jobs Through Small Business Innovation Act 

of 2011, and every 4 years thereafter, the National Research 

Council shall submit to the head of the agency entering into 

the agreement, 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 regarding 

the study conducted under paragraph (1) and containing 

the recommendations described in paragraph (1); and 

(B) not later than 2 years after the date of enactment of 

the Creating Jobs Through Small Business Innovation Act 

of 2011, the National Research Council shall submit to the 

head of the agency entering into the agreement, 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 of preliminary findings and recommendations regarding the study conducted under paragraph (1)(B). 


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XX. ADDITIONAL VIEWS

ADDITIONAL VIEWS OF REPRESENTATIVES JOHNSON AND 

WILSON 

We are pleased to support H.R. 1425, the Creating Jobs Through 

Small Business Innovation Act of 2011. Small businesses are key 

players in fueling technological innovation and creating jobs in the 

United States. We can help to ensure a vibrant small business community in this country by enacting a comprehensive reauthorization of the SBIR and STTR programs. 

However, we are very troubled that the legislation does not include a formal outreach provision and extremely disappointed that 

our efforts to address this omission were blocked. We believe that 

innovation can come from anywhere and that all small businesses 

are capable of developing innovative new technologies. Our chances 

of getting game-changing innovation are significantly increased if 

the SBIR applicant pool is larger and more diverse. For this reason, a formal outreach program focused on bringing additional 

qualified small businesses into the SBIR program is appropriate. 

Such a program should target small businesses owned by veterans 

and small businesses located in rural areas and areas suffering 

from high unemployment, as well as small businesses owned by 

women and minorities. 

One of the four stated congressional objectives of the SBIR program is to encourage greater participation by women-and minorityowned small businesses. Unfortunately, in its 2008 evaluation of 

the SBIR program, the National Research Council found that the 

program was not meeting this objective. Despite this, Democratic 

attempts at both the subcommittee and Full Committee markups 

to provide agencies with a formal mechanism for carrying out outreach and technical assistance activities and to supply them with 

the required resources to do so were blocked. 

Majority objections to an outreach program were initially linked 

to cost. However, a cost-neutral proposal was also rejected over unfounded concerns that it created a mandate. A plain reading of the 

cost-neutral proposal demonstrates that it did not require all SBIR 

agencies to fund outreach and technical assistance activities. Only 

the agencies that chose to participate in the pilot program under 

Section 310 would have been required to set aside a small percentage of funding for targeted outreach activities. Moreover, a reasonable waiver clause was included for cases where an exemption from 

the requirement would be necessary and appropriate. That being 

said, making any initiative entirely elective—as proposed by some 

of our Majority colleagues at the markup—will simply not address 

the participation challenges facing the SBIR program and is not acceptable. 


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We will have shirked our responsibilities to the SBIR program 

and previous congressional intent if we continue to ignore this 

issue and fail to include a meaningful provision in the bill to ensure that outreach to underrepresented small businesses is occurring. It is our sincere hope that this issue will be adequately addressed as this legislation moves forward. 

EDDIE BERNICE JOHNSON. 

FREDERICA WILSON. 


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XXI: PROCEEDINGS OF THE MARKUP BY THE 

SUBCOMMITTEE ON TECHNOLOGY AND 

INNOVATION’S MARKUP ON H.R. 1425, 

CREATING JOBS THROUGH SMALL BUSINESS INNOVATION ACT OF 2011 

WEDNESDAY, April 13, 2011 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON TECHNOLOGY AND INNOVATION, 

COMMITTEE ON SCIENCE AND TECHNOLOGY, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:09 a.m., in Room 

2318 of the Rayburn House Office Building, Hon. Benjamin Quayle 

[Chairman of the Subcommittee] presiding. 

Chairman QUAYLE. Good morning. The Subcommittee on Technology and Innovation of the Committee on Science, Space, and 

Technology will come to order. 

Pursuant to notice, the Subcommittee on Technology and Innovation meets to consider the following measure: H.R. 1425, the Creating Jobs through Small Business Innovation Act of 2011. We will 

now proceed with the markup beginning with opening statements, 

and I will begin. 

Today our Subcommittee will consider H.R. 1425, the Creating 

Jobs through Small Business Innovation Act of 2011. This bill was 

introduced on April 7th and referred to our Subcommittee. H.R. 

1425 authorizes the Small Business Innovation Research and the 

Small Business Technology Transfer programs through fiscal year 

2014. 

These programs play a vital role in expanding innovation, and 

increasing the role of small business in federal research and development. They have also helped thousands of small businesses create and sustain jobs, and commercialize their products. 

While the SBIR and STTR programs have been effective, there 

are areas where they can be improved. I will summarize a few of 

the major changes proposed in H.R. 1425. First, the legislation increases the award amounts in both the SBIR and STTR programs 

for phase I and phase II to $150,000 and $1 million, respectively. 

The legislation also provides for the award size to be annually indexed to inflation moving forward. 

Second, the legislation enables majority venture capital-backed 

firms to compete for a limited percentage of SBIR awards. Up until 

a 2005 administrative ruling, small businesses with majority backing by venture capital were eligible to participate in SBIR. The legVerDate Mar 15 2010 18:05 Jun 02, 2011 Jkt 099006 PO 00000 Frm 00087 Fmt 6601 Sfmt 6601 E:\HR\OC\HR090P1.XXX HR090P1

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islation we are considering today would set a ceiling on the amount 

of funds that each agency may award to companies with substantial venture capital backing. Allowing these firms to compete for a 

percentage of awards will continue to provide agencies with the 

flexibility of making awards to the most competitive companies, regardless of their venture capital relationship, while preserving the 

majority of awards for small businesses without substantial venture capital involvement. 

Third, the program continues to emphasize the importance of 

commercializing technologies by creating commercialization pilot 

programs and providing increased use of funds for technology assistance. The SBIR and STTR programs must continue to evolve to 

help companies overcome the ‘‘Valley of Death’’ between basic research and commercialization. 

Most importantly, the legislation requires rigorous evaluation of 

the programs to ensure that we are getting the greatest return on 

our taxpayer investment. Currently, our ability to conduct effective 

evaluations is hampered by insufficient data collection and a lack 

of common measurement criteria among participating federal agencies. The legislation before us today would strengthen SBIR and 

STTR data collection requirements and evaluations, both at the individual agencies and within the management of the entire program at the Small Business Administration. This is particularly 

necessary in today’s budget environment. 

I am pleased that Ranking Member Wu has chosen to be an 

original cosponsor of this legislation, and recognize that he has 

championed these programs over the years. We both agree that the 

lack of a substantive reauthorization creates uncertainty for many 

small businesses across the nation, and may have the effect of limiting some innovations these programs could otherwise support. I 

would also like to acknowledge and thank Chairman Hall and 

Ranking Member Johnson for joining us as original cosponsors of 

this legislation. I strongly urge my colleagues to support H.R. 1425. 

[The statement of Mr. Quayle follows:] 

PREPARED STATEMENT OF CHAIRMAN BENJAMIN QUAYLE

Today our subcommittee will consider H.R. 1425, the Creating Jobs Through 

Small Business Innovation Act of 2011. This bill was introduced on April 7 and referred to our Subcommittee. H.R. 1425 authorizes the Small Business Innovation 

Research (SBIR) and the Small Business Technology Transfer (STTR) programs 

through fiscal year 2014. 

These programs play a vital role in expanding innovation, and increasing the role 

of small business in the federal research and development. They have also helped 

thousands of small businesses create and sustain jobs, and commercialize their 

products. 

While the SBIR and STTR programs have been effective, there are areas where 

they can be improved. I will summarize a few of the major changes proposed in H.R. 

1425: First, the legislation increases the award amounts in both the SBIR and 

STTR programs for Phase I and Phase II to $150,000 and $1 million, respectively. 

The legislation also provides for the award size to be annually indexed to inflation 

moving forward. 

Second, the legislation enables majority venture capital backed firms to compete 

for a limited percentage of SBIR awards. Up until a 2005 administrative ruling, 

small businesses with majority-backing by venture capital were eligible to participate in SBIR. The legislation we are considering today would set a ceiling on the 

amount of funds that each agency may award to companies with substantial venture 

capital backing. 

Allowing these firms to compete for a percentage of awards will continue to provide agencies with the flexibility of making awards to the most competitive compaVerDate Mar 15 2010 18:05 Jun 02, 2011 Jkt 099006 PO 00000 Frm 00088 Fmt 6601 Sfmt 6621 E:\HR\OC\HR090P1.XXX HR090P1

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nies, regardless of their venture capital relationship, while preserving the majority 

of awards for small businesses without substantial venture capital involvement. 

Third, the program continues to emphasize the importance of commercializing 

technologies by creating commercialization pilot programs and providing increased 

use of funds for technology assistance. The SBIR and STTR programs must continue 

to evolve to help companies overcome the ′′Valley of Death′′ between basic research 

and commercialization. 

Most importantly, the legislation requires rigorous evaluation of the programs to 

ensure that we are getting the greatest return on our taxpayer investment. Currently, our ability to conduct effective evaluations is hampered by insufficient data 

collection and a lack of common measurement criteria among participating federal 

agencies. The legislation before us today would strengthen SBIR and STTR data collection requirements and evaluations, both at the individual agencies and within the 

management of the entire program at the Small Business Administration. This is 

particularly necessary in today’s budget environment. 

Ranking Member WU. I now recognize the gentleman from Oregon for his opening statement. 

Mr. WU. Thank you, Chairman Quayle. I have looked forward to 

this day. I think that by coming out of the chute fast on this bill 

that we will get this bill passed and it is important. It will be the 

first jobs legislation out of this Congress. It is important because 

small businesses are the most important component of jobs creation 

as well as creating an innovation-based economy, and I want to 

recognize your leadership in putting this bill together and Mr. Hall, 

the Chairman of the Full Committee, for his contribution in putting this legislation together. 

We have passed this legislation through the last two Congresses, 

and each time we have come close to getting the legislation done, 

but last time it came right down to the last day of the lame-duck 

session. This time, I think that coming out first and early means 

that we will get the legislation done. 

Small businesses are crucial to the economic growth of our Nation and our ability to create new jobs. In fact, according to the 

Small Business Administration, small businesses have created 64 

percent of the net new jobs over the last 15 years. The SBIR and 

STTR programs are the largest source of federal support for 

technologic innovation in the private sector. These programs are instrumental in spurring innovation by small businesses in this country and helping them to create jobs. 

As our hearing last month also highlighted, small businesses also 

fill a crucial role in meeting federal technologic needs, particularly 

in the national security sector. The SBIR and STTR programs tap 

into the unique capabilities of small businesses to develop cost-effective and technologic solutions quickly and efficiently. 

The bill we are marking up today is a good bill. The bipartisan 

bill that we moved through the Committee and passed through the 

House last Congress serves as a good template for this bill. Also, 

the bill builds upon some of the very good work that was done in 

the Senate at the end of the last session. 

The message is clear: After more than 3 years of working on a 

comprehensive reauthorization, we have finally reached a place 

where there is nearly universal support for reauthorizing these 

very important programs and at long last bicameral, bipartisan 

agreement on the best way to go about doing that. 

Of course, there are certainly ways that this bill could be 

strengthened and improved, and I am confident that it will be as 


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it makes its way through this Committee, through the Small Business Committee and to the House Floor. 

But I would urge against us spending months more and even 

years more tinkering around the edges, allowing the perfect to be 

the enemy of the good and continuing to let these important programs languish. The time has come to get this good bill over the 

finish line. 

This bill incorporates the key priorities that were included in the 

previous House bill. It allows venture capital-backed small businesses to once again apply for awards and specifically defines their 

eligibility requirements. It increases award sizes for phase I and 

phase II awards. It provides more flexibility to the program to ensure that it continues to meet the ever-changing needs of the hightech sector. It ensures better data collection, allowing for improved 

oversight and evaluation. It streamlines paperwork requirements 

and reduces bureaucratic red tape, things that all of us support, 

and it expands commercialization efforts to help ensure that the 

taxpayers get the biggest bang for their buck. 

Thank you, Chairman Quayle, for working with me on this bill. 

It has been a pleasure working with you, and I commend you for 

your leadership for this good piece of legislation, and I also want 

to thank the chairman of the Full Committee, Mr. Hall, for his 

good work on this legislation as well as Ranking Member Eddie 

Bernice Johnson for her work on this legislation. 

Thank you, Mr. Chairman. 

[The statement of Mr. Wu follows:] 

PREPARED STATEMENT OF RANKING MEMBER WU

Thank you, Chairman Quayle. And thank you for holding this subcommittee 

markup today. 

I could not be more pleased that we are meeting today to mark up the Creating 

Jobs Though Small Business Innovation Act of 2011, which will reauthorize the 

SBIR and STTR programs. I am also pleased to join you as an original sponsor of 

the bill. 

Small businesses are arguably the most important component of our innovationbased economy. Countless new technologies—which have transformed the way that 

we live and work—were born and bred in small businesses throughout this country. 

And small businesses are critical to economic growth in this country and our ability 

to create new jobs. In fact, according to the Small Business Administration, small 

businesses have generated 64 percent of the net new jobs over the last 15 years. 

The SBIR and STTR programs are the largest source of federal support for technological innovation in the private sector. These programs are instrumental in spurring innovation by small businesses in this country and helping them to create jobs. 

As our hearing last month also highlighted, small businesses also fill a critical 

role in meeting federal technology needs, particularly in the national security sector. 

The SBIR and STTR programs tap into the unique capabilities of small businesses 

to develop cost-effective technological solutions quickly and efficiently. 

The bill we are marking up today is a good bill. The bipartisan bill that we moved 

through the Committee and passed through the House last Congress serves as a 

good template for this bill. Also, the bill builds upon some of the very good work 

that was done in the Senate at the end of last year. 

The message is clear. After more than 3 years of working on a comprehensive reauthorization bill, we have finally reached a place where there is nearly universal 

support for reauthorizing these important programs and - at long last - bicameral, 

bipartisan agreement on the best way to go about doing that. 

Of course, there are certainly ways that this bill could be strengthened and improved and I am confident that it will be as it makes its way through this Committee, through the Small Business Committee, and to the House floor. 

But I would urge against us spending months more—and even years more—tinkering around the edges, allowing the perfect to be the enemy of the good and conVerDate Mar 15 2010 18:05 Jun 02, 2011 Jkt 099006 PO 00000 Frm 00090 Fmt 6601 Sfmt 6621 E:\HR\OC\HR090P1.XXX HR090P1

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tinuing to let these important programs languish. The time has come to get this 

good bill over the finish line. 

The bill incorporates the key priorities that were included in the previous House 

bill: 

•It allows venture capital-backed small businesses to once again apply for awards 

and specifically defines their eligibility requirements; 

•It increases award sizes for Phase I and Phase II awards; 

•It provides more flexibility to the program to ensure that it continues to meet 

the ever-changing needs of the high-tech sector; 

•It ensures better data collection, allowing for improved oversight and evaluation; 

•It streamlines paperwork requirements and reduces bureaucratic red tape, things 

that all of us support; and 

•It expands commercialization efforts to help ensure that the taxpayers get the 

biggest bang for their buck. 

Thank you, Chairman Quayle, for working with me on this bill. It has been a 

pleasure working with you and I commend you for this good piece of bipartisan legislation. 

Chairman QUAYLE. Thank you, Mr. Wu. 

Without objection, all Member opening statements will be placed 

into the record at this point. 

We will now proceed with the markup. Without objection, I ask 

unanimous consent that the bill is considered as read and open to 

amendment at any point and that the Members proceed with the 

amendments in the order of the roster. So ordered. 

Chairman QUAYLE. Are there any amendments to the bill? 

Mr. WU. Mr. Chairman, I have an amendment at the desk. 

Chairman QUAYLE. The first amendment is offered by the gentleman from Oregon. Are you ready to proceed with your amendment? 

Mr. WU. Yes, I am. 

Chairman QUAYLE. The clerk will report the amendment. 

The CLERK. Amendment number 006, amendment to H.R. 1425, 

offered by Mr. Wu of Oregon. 

Chairman QUAYLE. I ask unanimous consent to dispense with 

the reading. Without objection, so ordered. 

The gentleman is recognized for 5 minutes to explain the amendment. 

Mr. WU. Thank you very much, Mr. Chairman. 

The last comprehensive reauthorization for the SBIR program 

expired in September of 2008. The current legislation authorizes a 

reauthorization period of 5 years, and—I am sorry—reauthorizes 

the legislation for 2 years, and this amendment reauthorizes the 

bill for a total of 5 years. I believe that those who are applying for 

SBIR grants would appreciate some stability in the program for a 

longer period of time and also the longer period of time permits the 

National Research Council evaluation program to be completed in 

the 4-year period after enactment. Providing for a 5-year reauthorization will allow us to take that evaluation into consideration before we begin the reauthorization for the next cycle. 

I recognize that this legislation makes significant changes and 

there is nothing preventing us from revisiting these issues in the 

interim. We do not need an expired reauthorization to legislate, 

and I believe that the reauthorization is really quite short. The 

Senate started with a much longer reauthorization period, and I do 

believe that ultimately we will settle on an appropriate period 

somewhere in the 5-, 6- or 7-year range, and I believe that moving 

toward that number will be a significant sign to the other chamber 


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that we are ready to meet them close to halfway so that we can 

expedite the process of moving this legislation through conference 

and to legislation that can pass both chambers and that the President can sign, and 

I do urge adoption of this amendment. 

Chairman QUAYLE. I thank the ranking member for his amendment and appreciate his desire to provide a longer authorization 

for the program. However, I believe that the 3-year authorization 

currently provided in H.R. 1425 is appropriate. 

The bill before us makes significant changes to the programs including provisions modifying the participation of companies backed 

by venture capital, awards sizes and data collection. Additionally, 

during the time of the authorization, the National Research Council and Government Accountability Office are scheduled to complete 

a number of ongoing studies which will help inform the next reauthorization measure. I believe it is Congress’s responsibility to take 

another look at this program after 3 years, and that 5 years is too 

long of a time for it to continue without Congress considering adjustments. Additionally, I am hopeful that our economic situation 

will be improved in 3 years’ time and that also may inform updates 

to the programs that are prudent prior to 2016. 

For these reasons, I must oppose the ranking member’s amendment. 

Mr. WU. If the chairman would yield just for a very brief comment? 

Chairman QUAYLE. I yield. 

Mr. WU. Thank you very much, Mr. Chairman. I just want to 

point out again that the NRC study will take 4 years to be completed, and I do believe that taking the results of that study into 

account will be important to our further consideration of a reauthorization. 

I yield back to the chairman. 

Chairman QUAYLE. Duly noted, and I want to thank the member 

for the amendment. 

Is there further discussion on the amendment? If no, the vote occurs on the amendment. All those in favor— 

Mr. WU. Whoa, whoa—I am sorry. Go ahead. 

Chairman QUAYLE. All in favor, say aye. Those opposed, say no. 

The nays have it and the amendment is not agreed to. 

Mr. WU. Mr. Chairman, I just want to note that given the number of folks who are here today, I am not going to call for a recorded vote today. I can also count in the Full Committee, but I 

just want to let the Chairman know that I am likely to offer this 

amendment and call for a vote at the Full Committee. 

Chairman QUAYLE. Thank you, Mr. Wu. 

Mr. WU. Thank you. 

Chairman QUAYLE. Are there any other amendments to the bill? 

Mr. LIPINSKI. Mr. Chairman. 

Chairman QUAYLE. For what purpose does the gentleman seek 

recognition? 

Mr. LIPINSKI. I have an amendment at the desk. 

Chairman QUAYLE. The next amendment is offered by the gentleman from Illinois, Mr. Lipinski. Are you ready to proceed with 

your amendment? 


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Mr. LIPINSKI. Yes, I am. 

Chairman QUAYLE. The clerk will report the amendment. 

The CLERK. Amendment number 015, amendment to H.R. 1425 

offered by Mr. Lipinski of Illinois. 

Chairman QUAYLE. I ask unanimous consent to dispense with 

the reading. Without objection, so ordered. 

Mr. Lipinski is now recognized for 5 minutes to discuss his 

amendment. 

Mr. LIPINSKI. Thank you, Chairman Quayle. I would like to 

thank you and Ranking Member Wu for your work in conjunction 

with Chairman Hall and Ranking Member Johnson to quickly 

move this critical bill forward. 

I have been a strong supporter of the SBIR and STTR programs 

since I have been in Congress and I am excited at the prospect of 

doing away with temporary extensions and finally reauthorizing 

these programs and that is why I am proud to be a cosponsor of 

this bill. 

Since its inception in 1982, the SBIR program has created jobs 

by making sure our Nation’s small businesses help the federal research agencies accomplish their missions. But in spite of these 

programs, American innovations don’t always translate into American jobs. Too many of our breakthroughs ultimately turn into 

products manufactured abroad in countries like Japan and China. 

My amendment would help reverse this trend and create American 

manufacturing jobs. 

The bill before us makes permanent the successful commercialization pilot program at the Department of Defense and authorizes other agencies to follow DOD’s lead by establishing commercialization pilot programs of their own. My amendment would improve the bill by requiring civilian agencies when making awards 

in the pilot program to consider whether a technology is likely to 

be manufactured in the United States. This will help make sure 

that the taxpayer dollars we invest in R&D ultimately produce 

American jobs. 

I urge my colleagues to support this amendment. I think this is 

a commonsense approach. We should be focusing not just on job 

creation; we should be focusing on American job creation. There is 

so much that has been done, so much research that has been done, 

so much technology that has been developed here in the United 

States. It is important that we do everything we can to make the 

next step and help ensure that these jobs are done in America, the 

jobs that come out of this technology. 

So I urge my colleagues to support this amendment, and I yield 

back the balance of my time. 

Chairman QUAYLE. Thank you, Mr. Lipinski. 

I have some reservations about the ability of an agency to measure the likelihood of whether the technology supported by the commercialization pilot program would be manufactured in the United 

States. That being said, I agree with the gentleman from Illinois 

that the SBIR and STTR programs should be promoting job growth 

within the United States, and I support the amendment. I want to 

thank you for the amendment. 

Is there any further discussion on the amendment? 

Mr. WU. Mr. Chairman. 


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Chairman QUAYLE. The gentleman from Oregon. 

Mr. WU. I thank the chairman and I thank the gentleman from 

Illinois for this good amendment. I do believe that a very important 

goal of this legislation is to create jobs in the United States and 

I think that this amendment will move in that direction, and I 

thank the gentleman and yield back. 

Chairman QUAYLE. Thank you. The chair recognizes Mrs. 

Biggert. 

Mrs. BIGGERT. Thank you, Mr. Chairman. I just have a question 

of the sponsor. 

In looking at this, I understand that you want to have the manufacturing done in the United States, but what does it mean to consider? What happens if it is not? And in many case where we have 

a product, you know, it is where we bring in parts from other countries to put into the product. How does that work? Is there a penalty if you don’t have everything made in the United States? 

Mr. LIPINSKI. Would the gentlelady yield? 

Mrs. BIGGERT. I yield to the gentleman. 

Mr. LIPINSKI. No, that is an important point. There is no way to 

guarantee that it is going to be made in the United States. This 

is just saying when the award is made that consideration has to 

be given to the expectation of whether this will be made in the 

United States, but there is nothing whatsoever in here that says 

there is a penalty if it is not made in the United States. We cannot 

be certain of that. No one who is judging the submission for an 

award would be able to know for sure, and there is no way to go 

back and— 

Mrs. BIGGERT. Reclaiming my time. Does it mean then that 

maybe an award would be made to someone who is going to manufacture in the United States over someone else who is going to use 

other products from foreign countries? Will that be a priority? 

Mr. LIPINSKI. Well, the intention is to make a priority the 

awards going to someone someplace that is expected to—there is a 

greater expectation that it will create jobs in the United States 

rather than jobs elsewhere. So yes, the purpose of it is to help create American jobs but there are no guarantees and there is not a 

way in this amendment to penalize, but I certainly think that we 

should be doing what we can—these are federal dollars. We should 

be doing what we can to encourage and do the best that we can 

to be creating American jobs from this. 

Mrs. BIGGERT. Reclaiming my time. Then do you think that 

sometimes we will give awards to someone who probably doesn’t 

have as good a product as somebody else who is using some foreign 

companies? 

Mr. WU. Will the gentlelady yield? 

Mrs. BIGGERT. Yes. 

Mr. WU. Let me give the gentlelady a potential example of how 

this might work, how this might work. A study was done at Carnegie Mellon University, I believe the underlying technology was 

optical chips, and what the principal investigator found was that 

the folks with really cutting-edge technology had an option of manufacturing those chips either in the United States close to the 

source of the research or they could try to manufacture in China, 

and actually found that the manufacturing of these chips in China 


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was not only unsuccessful but was deleterious to the domestic prior 

generation optical chip technology here in the United States. I 

don’t know if I made myself clear, but that is perhaps the simplest 

way to describe what she found, what this professor found. 

In that instance, there were several competing companies to 

manufacture this cutting-edge optical chip technology, and under 

those conditions, I think that, again, hypothetically, if they had applied for SBIR funding, that there might be an inclination to make 

awards to those companies which were inclined to do their manufacturing in the United States, and I think that is appropriate not 

only to create American jobs but also to keep that very important 

industry in the United States. 

Granted, this is hypothetical but this is a research paper which 

is in the literature and which we can invite her to come talk to the 

Science Committee at any time, but I think it is a very important 

example of keeping jobs and technology, cutting-edge technology, 

and very important jobs here in the United States, and I yield back 

to the gentlelady. 

Mrs. BIGGERT. Thank you. Reclaiming my time. And I thank both 

gentlemen. I just wanted to make sure when we go back and look 

at the legislative intent that it is not black and white saying that 

you have to go to those that are manufactured in the United 

States. Of course we want to have that but I think sometimes there 

is a product that we might want to have developed, and I yield 

back. 

Chairman QUAYLE. Is there further discussion on the amendment? If no, the vote occurs on the amendment. All those in favor, 

say aye. Those opposed, say ‘‘no.’’ The ayes have it and the amendment is agreed to. 

I now recognize myself to offer the next amendment. I have an 

amendment at the desk, amendment number 007. The clerk will 

report the amendment. 

The CLERK. Amendment number 007, amendment to H.R. 1425 

offered by Mr. Quayle of Arizona. 

Chairman QUAYLE. I ask unanimous consent to dispense with 

the reading. Without objection, so ordered. 

I recognize myself for 5 minutes to explain the amendment. 

The bill before us today strives to shorten the length of time it 

takes for an agency to makes final decisions on SBIR or STTR 

awards. For many small businesses, waiting months on end to determine if they will receive an award makes budgeting and 

prioritization difficult. The bill sets new requirements for agencies 

to make a final decision within 90 days after a solicitation is closed. 

While I support the goal of section 206 to assist small businesses 

anxious to find out the fate of their proposal, I also recognize the 

rigorous peer review that some agencies subject these proposals to 

and respect that this process may take longer than the 90 days 

provided by the new shortened period for final decisions on proposals. 

My amendment would permit agencies that typically require a 

period longer than 90 days to complete their internal peer-review 

requirements, in this case, the National Institutes of Health and 

the National Science Foundation, to maintain these systems. The 

amendment would allow them to exceed the 90 days’ limitations beVerDate Mar 15 2010 18:05 Jun 02, 2011 Jkt 099006 PO 00000 Frm 00095 Fmt 6601 Sfmt 6601 E:\HR\OC\HR090P1.XXX HR090P1

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cause I believe it is most important to have a complete and rigorous review of each application. For these agencies to comply with 

the 90-day timeline, they would have to overhaul their peer-review 

process. I believe diluting the NIH and NSF peer-review processes 

would call into question the quality of awards in the SBIR and 

STTR programs as compared to the other programs these agencies 

support through their extramural research budgets. In order to 

avoid this unintended consequence, my amendment would maintain current peer-review processes for SBIR and STTR awards at 

NIH and NSF. 

Is there any further discussion on the amendment? Yes, the chair 

recognizes Mr. Wu. 

Mr. WU. Thank you very much, Mr. Chairman, and I believe that 

your amendment is a very, very good amendment. As I was reviewing the legislation as it came back in its draft form in this Congress, I became very concerned about the requirement, a hard-edge 

requirement that this process move forward within 90 days. I certainly believe in shortening up the cycle time. We have heard that 

from awardees and especially applicants repeatedly, so I am not 

standing up for foot dragging, and we do need to speed up the process. However, every single agency has made it clear that they make 

awards on a merit basis, and I don’t think that the legislation 

should force that process forward any faster than the agencies 

think that they can do it, and I have a very deep concern about 

the other agencies other than the ones that are already listed in 

here and also NIH and NSF. So I hope that as we move this legislation forward from this Subcommittee to the Full Committee and 

especially in that part of the process because I think we will have 

more opportunity to change this requirement in the Science Committee, I hope that we will further review how hard edge this 90- 

day requirement is and if it is appropriate to permit adjustment of 

that period, either in the legislation or in the regulations that the 

agencies work under, and I want to commend the chairman for 

what I believe to be a very good amendment here, and I yield back. 

Chairman QUAYLE. Thank you, Mr. Wu. 

Is there further discussion on the amendment? If no, the vote occurs on the amendment. All those in favor, say aye. Those opposed, 

say no. The ayes have it and the amendment is agreed to. 

Are there any other amendments to the bill? 

Ms. WILSON. Mr. Chairman, I have an amendment at the desk. 

Chairman QUAYLE. The next amendment is offered by the 

gentlelady from Florida, Ms. Wilson. Are you ready to proceed with 

your amendment? 

Ms. WILSON. Yes, I am. 

Chairman QUAYLE. The clerk will report the amendment. 

The CLERK. Amendment number 006, amendment to H.R. 1425, 

offered by Ms. Wilson of Florida. 

Chairman QUAYLE. I ask unanimous consent to dispense with 

the reading. Without objection, so ordered. 

The gentlelady is recognized for 5 minutes to explain the amendment. 

Ms. WILSON. Thank you, Chairman Quayle. 

Today I am offering a simple amendment. I am offering an 

amendment that was non-controversial in the last Congress when 


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it was included in the bipartisan authorization of the Small Business Innovation and Research and Small Business Technology 

Transfer programs that passed out of the Full Committee by a 

voice vote and then passed the House by an overwhelming margin 

of 386 to 41. 

My amendment authorizes $10 million for fiscal years 2012 to 

2014 for an outreach program at the Small Business Administration to attract small businesses owned and controlled by women 

and mathematics into the SBIR and the STTR programs. It is 8 

pages of identical text word for word other than last year’s authorized that was included in last year’s House Resolution 2965. 

One of the stated objectives of the SBIR program is to foster the 

participation of women- and minority-owned businesses in technological innovation. Unfortunately, a 2008 assessment of the program by the National Research Council showed that federal agencies involved in the SBIR have not been successful in meeting this 

goal. One example is the National Science Foundation, which the 

number of women-owned businesses receiving awards has remained flat. The results when analyzing minority-owned firms receiving SBIR funds is even more troubling. Awards have stagnated 

across every agency, and at the Department of Defense, the number actually declined substantially over time, falling under 10 percent in 2004 and getting progressively worse every year. 

My amendment addresses those concerns. It helps the Small 

Business Innovative Research program in meeting its objective. 

Furthermore, it also calls on federal agencies to reach out to small 

businesses from geographic areas that have historically not been 

involved in the program as well as those from areas that are suffering from high unemployment rates. It also provides for outreach 

to those businesses that are owned and controlled by service disabled veterans who are disabled while serving. Our veterans need 

our support, especially those that are disabled. 

Small businesses serve a vital role in our economy. They are innovative and more often than that the principal source of new jobs. 

You never know where the next big new idea will come from, and 

we must do all that we can to support the innovative potential of 

all of our small businesses. 

I urge you to support this amendment. I thank you, Mr. Chair. 

Chairman QUAYLE. Thank you, Ms. Wilson. The chair agrees 

with the gentlelady from Florida that we should encourage broad 

participation in the SBIR and STTR programs. However, I believe 

it is an inappropriate time to authorize a $10 million expenditure 

for the grant program created by this amendment. 

One of the strengths of H.R. 1425 is that it is revenue neutral. 

Funding for the SBIR and STTR programs come from a set-aside 

of preexisting agency research and development budgets. By authorizing this program, the Committee would be adding cost to this 

bill. Given our current budget situation, we feel it is extremely important to prevent growth in government expenditures. My understanding is that the gentleman from New Mexico, Mr. Lujan, will 

be offering an amendment which also encourages greater participation by underrepresented businesses without adding to the overall 

cost of the bill. I will be supporting that amendment. However, I 


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recommend opposing the amendment we are currently considering, 

and I urge my colleagues to oppose it as well. 

Is there any further discussion on that amendment? 

Mr. WU. Mr. Chairman. 

Chairman QUAYLE. The chair recognizes Mr. Wu. 

Mr. WU. Thank you, Mr. Chairman, and I urge adoption of this 

very sound amendment. 

It is a very important goal of the SBIR program in the underlying statute to foster participation by a broader range of applicants because you don’t know where the next great idea will be 

coming from, and the National Research Council in its study and 

recommendations found that the agencies participating in SBIR 

should take additional steps to increase the rates of women- and 

minority-owned firms and specifically recommended additional outreach efforts to achieve this goal. 

So I recommend adoption of the gentlelady’s amendment and 

yield back, Mr. Chairman. 

Chairman QUAYLE. Is there further discussion on this amendment? 

Ms. WILSON. If the chair will yield for a brief comment? 

Chairman QUAYLE. Yes, the chair yields. 

Ms. WILSON. Mr. Chair, I come from a district where this amendment would help create so many jobs. The $10 million would be 

miniscule within a year. I intend to also propose this amendment 

with the Full Committee, and I am hoping that by that time we 

will be sensitive to this population that we are trying to deal with 

to expand the opportunities. 

We talk about jobs, jobs, jobs. We came to Washington to create 

jobs. This is the way we create jobs. This is how we reduce the deficit, by creating jobs. I ask that you support the amendment when 

it comes up again since there is some reticence now. Thank you. 

Chairman QUAYLE. I thank you, Ms. Wilson. I do want to point 

out that this is $10 million a year, so it is $30 million, and I do 

support what I believe Mr. Lujan will be providing in an amendment, which is a revenue-neutral bill that will actually do the same 

thing without actually increasing our cost, so that is why I support 

that and not this because I think it will be much more efficient to 

get this through the House when you have a revenue-neutral bill 

like it is right now. 

Mr. WU. Mr. Chairman, whoever is controlling the time, if someone could yield me just a couple seconds here? 

Chairman QUAYLE. The chair recognizes Mr. Wu for a couple seconds. 

Mr. WU. Thank you very much, Mr. Chairman. Perhaps the 

gentlelady from Florida could work with the chairman and the 

chairman of the Full Committee so that between now and the Full 

Committee markup, her amendment could be restructured in a way 

so that it is revenue-neutral, and I realize that the gentlelady 

might prefer to go a different way but this is a very important objective and I believe that what the chairman may be indicating 

that if this amendment could be structured in a revenue-neutral 

way that it would receive very serious attention at the Full Committee level. 


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Chairman QUAYLE. I don’t know if I am saying that. I do think 

that what Mr. Lujan is proposing to offer is probably the best way 

to go about it to try to get underrepresented businesses involved 

in the SBIR program. 

Is there further discussion on the amendment? 

Mr. LUJAN. Mr. Chairman. 

Chairman QUAYLE. Yes, the chair recognizes Mr. Lujan. 

Mr. LUJAN. Mr. Chairman, while I fully appreciate what sounds 

like support for amendment 014, any time that we can have a conversation about allocating resources to be able to further reach out 

to minority-owned businesses, veteran-owned businesses, womenowned businesses, I think that is something that is worth having 

a serious conversation about and truly seeing how we may be able 

to work with Ms. Wilson by the time that we get to Full Committee. I do support her amendment as well, but just seeing what 

we might be able to further that along. I appreciate that. Thank 

you, Mr. Chairman. 

Chairman QUAYLE. Thank you. If no further discussion on the 

amendment, the vote occurs. All in favor, say aye. Those opposed, 

say no. The nays have it and the amendment is not agreed to. 

Ms. WILSON. I would like to have a recorded vote. 

Chairman QUAYLE. The clerk will call the roll. 

The CLERK. Chairman Quayle? 

Chairman QUAYLE. No. 

The CLERK. Chairman Quayle votes no. 

Mr. Smith? 

Mr. SMITH. No. 

The CLERK. Mr. Smith votes no. 

Mrs. Biggert? 

Mrs. BIGGERT. No. 

The CLERK. Mrs. Biggert votes no. 

Mr. Neugebauer? 

Mr. NEUGEBAUER. No. 

The CLERK. Mr. Neugebauer votes no. 

Mr. McCaul? 

Mr. MCCAUL. No. 

The CLERK. Mr. McCaul votes no. 

Mr. Fleischmann? 

[No response.] 

The CLERK. Mr. Rigell? 

Mr. RIGELL. No. 

The CLERK. Mr. Rigell notes no. 

Mr. Hultgren? 

Mr. HULTGREN. No. 

The CLERK. Mr. Hultgren votes no. 

Mr. Cravaack? 

Mr. CRAVAACK. No. 

The CLERK. Mr. Cravaack votes no. 

Mr. Hall? 

[No response.] 

The CLERK. Mr. Wu? 

Mr. WU. Yes. 

The CLERK. Mr. Wu votes aye. 

Mr. Sarbanes? 


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[No response.] 

The CLERK. Ms. Wilson? 

Ms. WILSON. Aye. 

The CLERK. Ms. Wilson votes aye. 

Mr. Lipinski? 

Mr. LIPINSKI. Aye. 

The CLERK. Mr. Lipinski votes aye. 

Ms. Giffords? 

[No response.] 

The CLERK. Mr. Lujan? 

Mr. LUJAN. Aye. 

The CLERK. Mr. Lujan votes aye. 

Ms. Johnson? 

[No response.] 

Chairman QUAYLE. Are there other members who wish to vote? 

The CLERK. Mr. Hall is not recorded. 

Chairman QUAYLE. The chair recognizes Mr. Hall. 

Chairman HALL. No. 

The CLERK. Mr. Hall votes aye—Mr. Hall votes no. Mr. Hall 

votes no. 

Chairman QUAYLE. Are there members who wish to change their 

vote? The clerk shall report the vote. 

The CLERK. Mr. Chairman, four members vote aye and nine 

members vote no. 

Chairman QUAYLE. On this vote, there were four ayes and nine 

no’s. The amendment is not agreed to. 


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Are there any other amendments to the bill? 

Mr. LIPINSKI. Mr. Chairman. 

Chairman QUAYLE. For what purpose does the gentleman seek 

recognition? 

Mr. LIPINSKI. I have an amendment at the desk. 

Chairman QUAYLE. The next amendment is offered by the gentleman from Illinois, Mr. Lipinski. Are you ready to proceed with 

your amendment? 

Mr. LIPINSKI. Yes, I am, Mr. Chairman. 

Chairman QUAYLE. The clerk will report the amendment. 

The CLERK. Amendment number 016, amendment to H.R. 1425, 

offered by Mr. Lipinski of Illinois. 


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Chairman QUAYLE. I ask unanimous consent to dispense with 

the reading. Without objection, so ordered. 

The chair now recognizes Mr. Lipinski to discuss his amendment. 

Mr. LIPINSKI. Thank you, Chairman Quayle. I will be very quick. 

Section 307 of this bill already authorizes the National Academy 

of Sciences to continue evaluating the SBIR and STTR programs. 

Among other things, this study will look at the number of jobs created by these programs. My amendment is very simple. It adds 

after the words ‘‘number of jobs created,’’ it adds ‘‘in the United 

States’’ making clear that Congress wants the academies to look at 

the creation of American jobs. While I would hope they would do 

this anyway, my clarification would make sure that Congress gets 

the information we need out of the study. 

I urge my colleagues to support the amendment and yield back 

the balance of my time. 

Chairman QUAYLE. Thank you, Mr. Lipinski. The chair agrees 

with the gentleman from Illinois that this is important for the National Academies to estimate the number of jobs created in the 

United States. I thank the gentleman for his recommendation and 

I support this amendment. 

Is there further discussion on the amendment? 

Mr. WU. Mr. Chairman. 

Chairman QUAYLE. The chair recognizes Mr. Wu. 

Mr. WU. I urge adoption of the amendment, and yield back the 

balance of my time. 

Chairman QUAYLE. Is there further discussion on the amendment? If no, the vote occurs on the amendment. All in favor, say 

aye. Those opposed, say no. The ayes have it and the amendment 

is agreed to. 

Are there any other amendments to the bill? 

Mr. LUJAN. Mr. Chairman. 

Chairman QUAYLE. For what purpose does the gentleman seek 

recognition? 

Mr. LUJAN. I have an amendment at the desk. 

Chairman QUAYLE. The clerk will report the amendment. 

The CLERK. Amendment number 015, amendment to H.R. 1425, 

offered by Mr. Lujan of New Mexico. 

Chairman QUAYLE. I ask unanimous consent to dispense with 

the reading. Without objection, so ordered. 

The gentleman is recognized for 5 minutes to explain his amendment. 

Mr. LUJAN. Thank you, Mr. Chairman. 

This amendment would authorize a review of the STTR program, 

the Small Business Technology Transfer program, by the National 

Research Council similar to the study that they did for the SBIR 

program. Such a review is long overdue. The most recent examination of the STTR program was a 2001 GAO report which was used 

from a 2001 reauthorization of the program. However, this report 

was based off of one or two phase II projects from 1995 to 1997, 

the first 3 years that such awards were made. So the past 14 years 

of STTR awards experience is left unexamined and unreviewed. 

Under this amendment, the initial study, which is to be submitted to Congress 2 years after enactment, will evaluate the partnerships created between small businesses and research instituVerDate Mar 15 2010 18:05 Jun 02, 2011 Jkt 099006 PO 00000 Frm 00102 Fmt 6601 Sfmt 6601 E:\HR\OC\HR090P1.XXX HR090P1

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tions, the effectiveness of the programs of transfering technology 

and capabilities from research institutions to small businesses, the 

degree of success at commercializing technologies developed in the 

program compared to similar technology transfer programs and the 

economic benefits achieved by the program. The study will also provide recommendations on the effects that an increase or decrease 

in the set-aside percentage for the STTR program would have and 

possible improvements to the program. They would not be recommending whether there be an increase or decrease, just what they 

believe the effects would be. 

It is imperative that a study of this program be performed as 

part of our constitutional oversight responsibilities, so I urge adoption of this amendment. I yield back. 

Chairman QUAYLE. I thank the gentleman from New Mexico for 

his interest in evaluating the STTR program. I agree that we need 

to learn more about the effectiveness of the STTR program in promoting technology transfer. I also agree that it is important to 

evaluate the effectiveness of the partnerships created between 

small businesses and research institutions including our Nation’s 

colleges and universities. 

While I support greater evaluation of this program, I am concerned about the effects of commissioning the NRC to conduct an 

entirely separate study when the bill already provides for continued regular evaluations of the largest programs across the Federal 

Government. In the time that we had to review the amendment, 

I am uncertain whether it may incur unnecessary cost and use of 

resources. 

As you know, H.R. 1425 commissions the NRC to continue its 

comprehensive evaluation of the SBIR program. It also asks the 

NRC to evaluate some features of the STTR program. However, I 

agree that we need more information to effectively evaluate a program that disburses over $200 million of our tax dollars each year. 

My sense is that this study can be incorporated within the currently scheduled SBIR study. To that end, would the gentleman 

consider withdrawing his amendment, recognizing that the chair 

hopes that we can work together at Full Committee to include a 

provision requiring a comprehensive evaluation of the STTR program? And I yield to the gentleman. 

Mr. LUJAN. Mr. Chairman, I would be willing to withdraw the 

amendment if we could work together on coming up with some language that we can agree on. Thank you. 

Chairman QUAYLE. I thank the gentleman from New Mexico, and 

we will work together on that language. 

Are there any other amendments to the bill? 

Mr. LUJAN. Mr. Chairman. 

Chairman QUAYLE. The gentleman from New Mexico. 

Mr. LUJAN. I have an amendment at the desk. 

Chairman QUAYLE. The clerk will report the amendment. 

The CLERK. Amendment number 014, amendment to H.R. 1425, 

offered by Mr. Lujan of New Mexico. 

[The amendment follows:] 

Chairman QUAYLE. I ask unanimous consent to dispense with 

the reading. Without objection, so ordered. 


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The chair now recognizes the gentleman from New Mexico for 5 

minutes to discuss his amendment. 

Mr. LUJAN. Thank you, Mr. Chairman. 

My amendment today adds a section to the bill that would require agencies to encourage applications from small businesses located in underrepresented areas or areas with excessive unemployment rates as well as small businesses owned and controlled by 

veterans, women and minorities. 

Now more than ever, as our country begins its recovery from the 

recession, we must support minority- and women-owned businesses. According to the United States Census Bureau, minorityowned businesses generate $1 trillion in economic output to the 

U.S. economy and create 5.9 million jobs, and these numbers are 

only predicted to grow. Women-owned firms represent almost 29 

percent of businesses in the United States. In my home State of 

New Mexico, minority-owned businesses represent over 30 percent 

of the businesses in the state. 

Mr. Chairman, the numbers prove that these businesses are an 

essential part of our economy and will continue to experience increased growth. Minority- and women-owned businesses have the 

potential to lift our most rural and underrepresented areas from 

poverty, and I am offering this amendment today to ensure that 

these important STTR and SBIR program opportunities are accessible and available to them. 

As our men and women return home from serving our country, 

it is critical that we provide them with the best possible opportunities to succeed professionally here at home. We must reach out to 

our veterans and help equip them with the technical assistance 

they need to develop and grow their businesses. Supporting veteran-, minority- and women-owned businesses is good for our economy and good for our Nation. 

And Mr. Chairman, we just learned that sadly for the first time 

in many years, the percentage of minority-owned firms has declined substantially in cooperation with DOD, and this is something that truly we have to figure out how to turn on again. 

I encourage my colleagues to vote for the amendment today. I 

thank you, Mr. Chairman. I yield back my time. 

Chairman QUAYLE. I thank the gentleman from New Mexico for 

his amendment. 

The amendment would require federal agencies to encourage 

SBIR and STTR applications from companies which historically 

have been underrepresented in SBIR and STTR awards. I believe 

that the competitive nature of the program is maintained under 

this amendment and that it aligns with the overall goals of the programs, and I urge my colleagues to vote aye on the amendment. 

Is there any other discussion on the amendment? If no, the vote 

occurs on the amendment. All in favor, say aye. Those opposed, say 

no. The ayes have it and the amendment is agreed to. 

Are there any other amendments to the bill? Appearing none, the 

vote occurs on the bill as amended. All those in favor, say aye. All 

those opposed, say no. The ayes have it. 

I will now recognize Ms. Biggert to offer a motion. 

Mrs. BIGGERT. Mr. Chairman, I move that the Subcommittee favorably report H.R. 1425 as amended to the Full Committee. FurVerDate Mar 15 2010 18:05 Jun 02, 2011 Jkt 099006 PO 00000 Frm 00104 Fmt 6601 Sfmt 6601 E:\HR\OC\HR090P1.XXX HR090P1

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thermore, I move that staff be instructed to prepare the Subcommittee report and make necessary technical and conforming 

change to the bill as amended in accordance with the recommendations of the Subcommittee. 

Chairman QUAYLE. The question is on the motion to report the 

bill favorably. Those in favor of the motion will signify by saying 

aye. Opposed, no. The ayes appear to have it and the resolution is 

favorably reported. 

Without objection, the motion to reconsider is laid upon the table. 

I move that members have 2 subsequent calendar days in which to 

submit supplemental minority or additional views on the measure. 

Without objection, so ordered. 

This concludes our Subcommittee markup. The chair declares the 

Subcommittee adjourned. 

[Whereupon, at 10:57 a.m., the Subcommittee was adjourned.] 


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Appendix: 

H.R. 1425, SECTION-BY-SECTION ANALYSIS, AMENDMENT ROSTER


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SECTION-BY-SECTION ANALYSIS OF

H.R. 1425, CREATING JOBS THROUGH SMALL BUSINESS INNOVATION ACT 

OF 2011 

Section By Section Description 

TITLE 1—REAOUTHORIZATION OF THE SBIR AND STTR PROGRAMS

Sec. 101. Extension Length 

This section extends the SBIR and STTR programs for 3 years until September 

30, 2014. 

Sec. 102. SBIR and STTR Award Levels 

This section increases the size of SBIR and STTR awards from $100,000 to 

$150,000 for Phase I and from $750,000 to $1 million for Phase II, and requires the 

SBA to make annual adjustments of the award sizes for inflation. The provision prohibits any agency from issuing an SBIR or STTR award if the size of the award 

exceeds the award guidelines established in this section by more than 50 percent. 

Finally, the provision requires federal agencies to maintain information on awards 

exceeding the award guidelines; including the award amount; a justification for exceeding the guidelines; the identity and location of the recipient; and whether or not 

the recipient firm has received venture capital, hedge fund, or private equity firm 

investment, and if so, whether or not it is majority owned and controlled by one or 

more venture capital companies, hedge funds, or private equity firms. Nothing shall 

prevent a Federal agency from supplementing an award under the SBIR or STTR 

programs with Federal funds that are outside of the SBIR and STTR allocations. 

Sec. 103. Agency and Program Flexibility 

The section allows SBIR and STTR applicants to receive awards for subsequent 

SBIR or STTR phases at another agency and also allows small business concerns 

which received SBIR or STTR awards to receive awards for subsequent phases in 

either the STTR or SBIR program, respectively. 

Sec. 104. Elimination of Phase II Invitations 

This section requires that federal agencies conduct their solicitation of Phase II 

SBIR and STTR proposals without any invitation, pre-screening, pre-selection, or 

down-selection process between the first and second phase. 

Sec. 105. Phase Flexibility 

This section grants agencies the ability to provide a Phase II Award if the Agency 

finds that the small business concern has already completed the work typically done 

during Phase I. 

Sec. 106 and Sec. 107. Participation by Firms with Substantial Investment 

from Multiple Venture Capital Operating Companies in a Portion 

of the SBIR Program 

Section 106 allows the Departments of Health of Human Services and Energy and 

the National Science Foundation to permit firms majority owned and controlled by 

one or more venture capital companies, one or more hedge funds, or one or more 

private equity firms to compete for up to 45 percent of the agency’s SBIR funds. All 

other qualifying federal agencies shall allow majority owned private investment 

backed small businesses to compete for up to 35 percent of the agency’s SBIR funds. 

Sec. 107 defines what affiliations are between various outside investors (such as 

venture capital companies, private equity firms, etc.) and small business concerns 

for purposes of determining whether the combination is eligible for an award under 

the SBIR program. 

Sec. 108. SBIR and STTR Special Acquisition Preference 

This section codifies the language from the SBIR and STTR Policy Directives confirming the intent of Congress to establish a special acquisition preference for SBIR 

and STTR Phase III awards. The provision clarifies that preference for contracts 

concerning research developed with SBIR or STTR funds should go to the developers 

and holders of SBIR and STTR technologies to the greatest extent practicable. 


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Sec. 109. Collaborating with Federal Laboratories and Research and Development Centers 

This section reduces the burden on cooperation between SBIR/STTR firms and 

federal laboratories by ensuring that such subcontracting is generally permitted 

without the requirement for a waiver. The provision also ensures that subcontracting to federal laboratories is not required of SBIR or STTR awardees. Finally, 

it clarifies that firms that have entered into a cooperative agreement with a federal 

laboratory are eligible to receive SBIR/STTR awards. 

Sec. 110. Notice Requirement 

This section ensures that the SBA is notified any time the SBIR or STTR policy 

directives are challenged in court. 

Sec. 111. Additional SBIR and STTR Awards 

The section allows SBIR and STTR applicants to receive one sequential Phase II 

award for a single project. It also requires agencies to verify that any activity to 

be performed with respect to a project with a Phase I and Phase II award has not 

been funded from another Federal agency. 

TITLE II—COMMERCIALIZATION AND OUTREACH INITIATIVES

Sec. 201. Technical assistance for awardees 

This section increases the amount of discretionary technical assistance that SBIR 

and STTR agencies can contract out to provide to awardees from $4,000 to $5,000 

for Phase I awards and from $4,000 to $5,000 per year for Phase II awards. The 

provision also states that this amount shall be in addition to the amount of the recipient’s award. It also requires agencies to provide SBIR and STTR award winners 

who wish to procure their own technical assistance with the allowable amount. Finally, the provision prohibits the agencies from using these funds to pay its contractor for technical assistance for a given SBIR or STTR award unless the contractor provides the technical assistance to that awardee. 

Sec. 202. Commercialization Readiness Program at Department of Defense 

This section extends the SBIR Commercialization Pilot Program (CPP) at the Department of Defense permanently and extends it to the department’s STTR program. It also changed the name to the Commercialization Readiness Program. The 

provision authorizes the Secretary of Defense to establish goals for transitioning 

Phase I and Phase II technologies in subcontracting plans for contracts of $100 million or more. The provision also requires the Secretary of Defense to set a goal to 

increase the number of Phase II contracts that lead to technology transition into 

programs of record or fielded systems and to use incentives to encourage agency program managers and prime contractors to meet that goal. Finally, the provision includes reporting requirements on the status of projects funded through CRP. 

Sec. 203. Commercialization Readiness Pilot Program for Civilian Agencies 

This section authorizes agencies other than the Department of Defense to create 

Commercialization Readiness Pilot Programs (using no more than 10% of their program authorization) to support advanced development of small business technologies 

which are facing high manufacturing or regulatory costs. The provision authorizes 

these agencies to grant post-Phase II awards up to two times the regular size (up 

to $3 million). Authority of establish such a pilot program expires at the end of 

FY2014. 

Sec. 204. Interagency Policy Committee 

This section directs the Office of Science and Technology Policy to establish an 

SBIR/STTR Interagency Policy Committee to review and make policy recommendations on ways to improve the effectiveness and efficiency of the SBIR and STTR programs. 

Sec. 205 Clarifying Definition of Phase III 

This section revises the definition of ‘‘Phase Three’’ of the SBIR program so that 

it is clear that such work shall be directed toward commercial applications and derives from research and development completed in earlier phases. 


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Sec. 206. Shortened Period for Final Decisions on Proposals and Applications 

This section requires that not later than 90 days after, and if the Administrator 

authorizes an extension, then not later than 180 days, from the date on which the 

solicitation closes for SBIR and STTR programs, that the Administrator make a decision on each proposal submitted. It also allows the Director of NIH to make an 

award under the SBIR or STTR programs when an application for award undergoes 

a technical and scientific peer review. 

TITLE III—OVERSIGHT AND EVALUATION

Sec. 301. Streamlining Annual Evaluation Requirements 

This section requires the Administration to report to Congress at least annually 

the number of proposals received from firms with venture capital, private equity, 

or hedge fund investment, including those owned and controlled by multiple venture 

capital, private equity, or hedge fund firms. It also requires the Administration to 

report on efforts to increase outreach to firms owned and controlled by women and 

socially or economically disadvantaged individuals, the implementation and compliance with the allocation of funds for firms majority owned and controlled by multiple venture capital, private equity or hedge fund companies, and appeals of Phase 

III awards and notices of noncompliance with the SBIR and the STTR Policy Directives. Finally, the section requires the Administration to coordinate the implementation of electronic databases at the participating agencies. 

Sec. 302. Data Collection From Agencies for SBIR 

This section requires agencies with an SBIR program to collect data annually on 

whether or not an applicant or awardee has venture capital, private equity or hedge 

fund investment, if it is majority owned and controlled by multiple venture capital, 

private equity, or hedge fund firms, the amount of that outside capital it has received at the time of award, if it has foreign investors and who they are, if it is 

owned by a woman, if it is owned by a socially or economically disadvantaged individual, and if it has a university affiliation. The provision also requires agencies to 

justify awards given that exceed the statuary guidelines. Agencies must collect data 

and report annually on whether or not the award winner is from a state receiving 

less federal research funding for small businesses than a majority of other states. 

Sec. 303. Data Collection From Agencies for STTR 

This section requires agencies with an STTR program to collect data annually on 

whether or not an applicant or awardee has venture capital, private equity or hedge 

fund investment, if it is majority owned and controlled by multiple venture capital, 

private equity, or hedge fund firms, the amount of that outside capital it has received at the time of award, if it has foreign investors and who they are, if it is 

owned by a woman, if it is owned by a if it is owned by a socially or economically 

disadvantaged individual, and if it has a university affiliation. The provision also 

requires agencies to justify awards given that exceed the statutory guidelines. 

Sec. 304. Public Database 

This section requires that the public database maintained by the Administrator 

include information on whether or not a firm receiving an award has venture capital, private equity or hedge fund investment, if it is majority owned and controlled 

by multiple venture capital, private equity, or hedge fund firms, the amount of that 

outside capital it has received at the time of award, is owned by a woman, is owned 

by a if it is owned by a socially or economically disadvantaged individual, or has 

a university affiliation. 

Sec. 305. Government Database 

This section requires that the government database maintained by the Administrator in coordination with the agencies for the purposes of evaluation of the SBIR 

and STTR programs include information on the ownership structure and affiliations 

of awardee firms that have venture capital, private equity, or hedge fund investment, and that are majority owned and controlled by multiple venture capital, private equity, or hedge fund firms whether or not a firm is owned by a woman, is 

owned by a minority, or has a university affiliation. 


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Sec. 306. Accuracy in Funding Base Calculations 

This section requires the Comptroller General of the United States to conduct an 

audit of the SBIR and STTR programs to determine whether federal agencies are 

complying with the expenditure requirements. 

Sec. 307. Continued Evaluation by the National Academy of Sciences 

This section authorizes the National Academy of Sciences to continue its evaluation of the SBIR program through the end of fiscal year 2021 and requires that updates of the studies be provided to Congress every four years from the date of enactment. 

Sec. 308. Technology Insertion Reporting Requirements 

This section requires the Administration to include in its annual report to Congress information on Phase III awards issued by SBIR and STTR agencies, including the dollar amount of these awards, their recipients, and the name of component 

or agency issuing them. 

Sec. 309. Obtaining Consent from SBIR and STTR Applicants to Release 

Contact Information to Economic Development Organizations 

This section requires each Federal agency that conducts an SBIR or STTR program to enable small business concerns that are SBIR or STTR applicants to indicate whether that Federal agency has consent to identify the small business concern 

to local and State-level economic development organizations. 

Sec. 310. Pilot to Allow Funding for Administrative, Oversight, and Contract Processing Costs 

This section requires that the Administrator allow each Federal agency to not use 

more than 3 percent of the funds allocated to the SBIR programs for the first fiscal 

year beginning after the enactment of this subsection, and each year thereafter 

through fiscal 2014, for costs relating to administrative, oversight and contract processing activities for SBIR programs that the Federal agency was not carrying out 

the last full fiscal year before the enactment of this subsection, as well as for the 

period of 3 years after the enactment of this subsection, for the implementation of 

commercialization and outreach initiatives that were not in effect on the date of the 

enactment of this subsection. 

Sec. 311. GAO Study with Respect to Outside Investment Involvement 

This section requires that not later than 2 years after the date of the enactment 

of this Act, and every 2 years thereafter, the Comptroller General of the United 

States conduct a study on the impact of requirements relating to venture capital operating company, private equity firm, and hedge fund involvement in the SBIR and 

STTR programs. 

Sec. 312. Reducing Vulnerability of SBIR and STTR Programs to Fraud, 

Waste, and Abuse 

This section requires the Administrator to, not later than 90 days after the enactment of this Act, amend the SBIR Policy Directive and the STTR Policy Directive 

to include measures to prevent fraud, waste, and abuse. Critical provisions include: 

(1) Establishing dedicated administrative funds to be used by participating 

SBIR/STTR programs for targeted reviews of award recipients that could be 

at high risk for waste, fraud and abuse; 

(2) Requiring Inspectors General of participating SBIR/STTR federal agencies 

to establish fraud detection measures, coordinate fraud-related information 

sharing between agencies, and provide fraud prevention-related education 

and training to agencies administering the program; 

(3) Requiring the Small Business Administrator to amend the SBIR and STTR 

Policy Directives to include specific measures to prevent waste, fraud and 

abuse; 

(4) Creating a special SBIR/STTR telephone hotline that allows individuals to 

report waste, fraud and abuse; 

(5) Ordering the Government Accountability Office to conduct a study assessing 

the SBIR/STTR programs’ vulnerabilities to waste, fraud and abuse; and 


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(6) Strengthening the Small Business Administration’s existing Tech-Net Database by requiring SBIR and STTR applicants to submit additional information that will help reduce ′′duplicative funding.′′ 

Sec. 313. Simplified Paperwork Requirements 

This section directs the SBA Administrator to issue regulations or guidelines to 

(the extent possible) standardize SBIR and STTR application paperwork. 

TITLE IV—POLICY DIRECTIVES

Sec. 401. Conforming amendments to the SBIR and the STTR Policy Directives 

This section requires conforming amendments to the SBA’s SBIR and STTR Policy 

Directives within 180 days to implement the provisions of this Act. It also requires 

that the Administration publish the SBIR and STTR Policy Directives in the Code 

of Federal Regulations within 180 days. 

TITLE V—OTHER PROVISIONS

Sec. 501. Report on SBIR and STTR Program Goals 

This provision directs each federal agency required to participate in an SBIR or 

STTR program to: (1) develop metrics in conjunction with the Interagency Policy 

Committee described in Sec. 204 to evaluate the effectiveness and benefit of such 

program; (2) conduct an annual evaluation of their program using such metrics; and 

(3) report evaluation results annually to the Administrator and the relevant Congressional Committees. 

Sec. 502. Competitive Selection Procedures for SBIR and STTR Programs 

This section requires all SBIR or STTR funds to be awarded pursuant to competitive and merit-based selection procedures. 

Sec. 503. SBA Regulations on Loan Restrictions 

This section requires the SBA to develop regulations solely for purposes of the 

SBIR program that when or how restrictive covenants in loan agreements would 

constitute control for purposes of affiliation. 


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Æ 


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(209) 

XXII: PROCEEDINGS OF THE FULL COMMITTEE MARKUP ON H.R. 1425, CREATING 

JOBS THROUGH SMALL BUSINESS INNOVATION ACT OF 2011 

WEDNESDAY, MAY 4, 2011 

HOUSE OF REPRESENTATIVES, COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY, Washington, DC. 

The Committee met, pursuant to call, at 10:04 a.m., in Room 

2318 of the Rayburn House Office Building, Hon. Ralph M. Hall 

[Chairman of the Committee] presiding. 

Chairman HALL. Good morning to everyone. The Committee on 

Science, Space, and Technology will come to order. Pursuant to notice, the Committee on Science, Space, and Technology meets today 

to consider the following measure: H.R. 1425, the Creating Jobs 

Through Small Business Innovation Act of 2011. 

And before we proceed with the markup I would like to have a 

little homework done here. I would like to designate the vice chair 

for each of the subcommittees. Rule 1, Subsection F of the committee rules provides that the committee chair designate a majority 

member of each subcommittee to serve as vice chair of each subcommittee. Pursuant to the rules I am pleased to designate the 

Honorable Lamar Smith of Texas as the vice chair of the Subcommittee on Space and Aeronautics, the Honorable Dana Rohrabacher as the vice chair of the Subcommittee on Energy and Environment, the Honorable Judy Biggert as the sub chair on the Committee of Technology and Innovation, the Honorable Roscoe Bartlett as the vice chair of the Subcommittee on Research and Science 

Education, and the Honorable Sandy Adams as the vice chair of 

the Subcommittee on Investigations and Oversight. I thank each of 

them in advance for their service. Rosters reflecting these designations are in the drawers in front of you. 

And now we will proceed with the markup, again, with opening 

statements, and I will begin. 

Today we are going to commit—we are going to consider H.R. 

1425, the Creating Jobs Through Small Business Innovation Act of 

2011. This bill was introduced on April the 7th and was marked 

up by the Technology and Innovation Subcommittee April the 13th. 

H.R. 1425 authorizes the Small Business Innovation Research, 

SBIR, and the Small Business Technology Transfer, STTR, Programs through fiscal year 2014. 

These programs play a vital role in expanding innovation and increasing the role of small businesses and federal research and deVerDate Mar 15 2010 18:05 Jun 02, 2011 Jkt 099006 PO 00000 Frm 00209 Fmt 6601 Sfmt 6601 E:\HR\OC\HR090P1.XXX HR090P1

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velopment. Innovation developed through SBIR and STTR grants 

have in some cases led to rapid expansion resulting in many new 

jobs for our Nation. I am sure that most of you are familiar with 

companies like Qualcomm and Sonicare. These companies are no 

longer small, but at one point in time they were tiny, and they 

started to grow thanks in part to the SBIR Program. 

The legislation before us is a compromise and a comprehensive 

reauthorization of both programs. The bill will increase award 

amounts to both the SBIR and STTR Programs for phase I and 

phase II to $150,000 and $1 million respectively, enable small businesses that are majority venture capital backed to compete for a 

limited percentage of SBIR awards and continue to emphasize the 

importance of commercializing technologies. 

For the first time the bill would provide agencies flexibility to 

use up to three percent of their program funds toward activities relating to outreach, technical assistance, commercializations, program oversight, and quality control. 

The legislation before us today would also strengthen SBIR and 

STTR data collection requirements and evaluation measurement 

criteria. This would improve our ability to conduct effective evaluations of the programs and ensure that we are getting the greatest 

return on our taxpayer investment. 

I believe Chairman Broun may also submit an amendment today 

to improve the detections of fraud, waste, and the abuse in these 

various programs, and I commend him for working to include these 

provisions. 

I would also like to thank Chairman Quayle for his leadership 

on this legislation and for shepherding it through the subcommittee. I would also like to recognize Ranking Member Johnson 

and Wu, both members, for being original cosponsors of this legislation. 

I strongly urge my colleagues to support H.R. 1425. 

[The prepared statement of Mr. Hall follows:] 

PREPARED STATEMENT OF CHAIRMAN RALPH M. HALL

Today our Committee will consider H.R. 1425, the Creating Jobs Through Small 

Business Innovation Act of 2011. This bill was introduced on April 7th and was 

marked up by the Technology and Innovation Subcommittee on April 13th. 

H.R. 1425 authorizes the Small Business Innovation Research (SBIR) and the 

Small Business Technology Transfer (STTR) programs through fiscal year 2014. 

These programs play a vital role in expanding innovation, and increasing the role 

of small businesses in federal research and development. Innovations developed 

through SBIR and STTR grants have in some cases led to rapid expansion, resulting 

in many new jobs for our nation. I am sure that most of you are familiar with companies like Qualcomm and Sonicare. These companies are no longer small, but at 

one point in time, they were tiny, and they started to grow thanks in part to the 

SBIR program. 

The legislation before us is a comprehensive reauthorization of both programs. 

The bill would increase award amounts in both the SBIR and STTR programs for 

Phase I and Phase II to $150,000 and $1 million, respectively; enable small businesses that are majority venture capital backed to compete for a limited percentage 

of SBIR awards; and continue to emphasize the importance of commercializing technologies. 

For the first time, the bill would provide agencies flexibility to use up to three 

percent of their program funds toward activities related to outreach, technical assistance, commercialization, program oversight and quality control. 

The legislation before us today would also strengthen SBIR and STTR data collection requirements and evaluation measurement criteria. This would improve our 

ability to conduct effective evaluations of the programs, and ensure that we are getVerDate Mar 15 2010 18:05 Jun 02, 2011 Jkt 099006 PO 00000 Frm 00210 Fmt 6601 Sfmt 6621 E:\HR\OC\HR090P1.XXX HR090P1

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ting the greatest return on our taxpayer investment. I believe Chairman Broun may 

also submit an amendment today to improve the detection of waste, fraud, and 

abuse in these programs, and I commend him for working to include these provisions. 

I would like to thank Chairman Quayle for his leadership on this legislation and 

for shepherding it through the subcommittee. 

I would also like to recognize Ranking Members Johnson and Wu for being original cosponsors of this legislation. 

I strongly urge my colleagues to support H.R. 1425, and I now recognize the 

gentlelady from Texas for an opening statement. 

Chairman HALL. And I now recognize the gentlelady from Texas 

for an opening statement. Mrs. Johnson. 

Ms. JOHNSON. Thank you very much, Mr. Chairman. Today we 

are marking up H.R. 1425, the Creating Jobs Through Small Business Innovation Act of 2011. I am pleased to join you, Mr. Hall, as 

an original cosponsor of this important legislation and to reauthorize SBIR and the STTR Programs. 

I would like to thank Mr. Wu for his work on this bill. No one 

in Congress is more committed to SBIR and STTR Programs than 

Mr. Wu. His tireless efforts to support—in support of these programs and in getting this reauthorization bill enacted is to be admired and respected, and I want to thank you for all that you have 

done to get us to this point, Mr. Wu. 

Mr. Chairman, this is a good piece of legislation, and I am confident that the bill we have before us today is a better bill because 

it benefited from the bipartisan input in its development. We all 

recognize the important role that small businesses play in fueling 

technological innovation and creating jobs in the United States. 

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 recommit ourselves to these programs and get a comprehensive reauthorization 

bill enacted. 

As I have noted, I support this bill. It includes many good provisions that I believe are necessary and important and that will 

make the SBIR and STTR Programs more efficient and effective. 

The bill also takes great strides to modernize the programs, making them more responsive to the ever-changing, high tech sector, 

and the demands of the global economy. 

That being said, there is definitely room for improvement. For 

example, this bill falls short to include any formal outreach programs for women and minority-owned small businesses. This is despite the fact that increasing participation is one of the stated goals 

of the program and one which the National Academy’s founders decided they have a mixed track record. 

It is irresponsible for us to ignore this issue. The bill should include a meaningful provision that will give the agencies the tools 

and resources they need to conduct the outreach and technical assistance that is necessary to meet this challenge. 

I will be offering an amendment along with Congresswoman Wilson later this morning to rectify the situation. I hope it will be accepted. I know that some of our colleagues have other good amendVerDate Mar 15 2010 18:05 Jun 02, 2011 Jkt 099006 PO 00000 Frm 00211 Fmt 6601 Sfmt 6601 E:\HR\OC\HR090P1.XXX HR090P1

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ments to strengthen and improve the bill, and I hope they will be 

supported. 

Thank you, Mr. Chairman. Again, I look forward to working with 

you to get this bill to the House Floor as soon as possible, and I 

yield back the balance of my time. 

[The prepared statement of Ms. Johnson follows:] 

PREPARED STATEMENT OF REPRESENTATIVE EDDIE BERNICE JOHNSON

Thank you, Chairman Hall. Today, we are marking up H.R. 1425, the Creating 

Jobs Through Small Business Innovation Act of 2011. I am pleased to join you, 

Chairman Hall, as an original cosponsor of this important legislation to reauthorize 

the SBIR and STTR programs. 

I would also like to thank Mr. Wu for his work on this bill. No one in Congress 

is more committed to the SBIR and STTR programs than Mr. Wu. His tireless efforts in support of these programs and in getting this reauthorization bill enacted 

is to be admired and respected. Thank you for all that you have done to get us to 

this point, Mr. Wu. 

Mr. Chairman, this is a good piece of legislation. I am confident that the bill we 

have before us today is a better bill because it benefited from bipartisan input in 

its development. 

We all recognize the important role that small businesses play in fueling technological innovation and creating jobs in the United States. 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 recommit ourselves to these programs and get a comprehensive reauthorization bill enacted. 

As I’ve noted, I support this bill. It includes many good provisions that I believe 

are necessary and important, and that will make the SBIR and STTR programs 

more efficient and effective. 

The bill also takes great strides to modernize the programs, making them more 

responsive to the ever-changing high-tech sector and the demands of the global 

economy. 

That being said, there is definitely room for improvement. For example, this bill 

fails to include any formal outreach program for women and minority-owned small 

businesses. This is despite the fact that increasing participation is one of the stated 

goals of the program, and one for which the National Academies found a decidedly 

mixed track record. 

It is irresponsible of us to ignore this issue. The bill should include a meaningful 

provision that will give the agencies the tools and resources they need to conduct 

the outreach and technical assistance that is necessary to meet this challenge. 

I will be offering an amendment—along with Congresswoman Wilson—later this 

morning to rectify this situation and I hope that it will be accepted. 

I know that some of our colleagues have other good amendments to strengthen 

and improve the bill, and I hope that they will be supported. 

Thank you again, Mr. Chairman. I look forward to working with you to get this 

bill to the House floor as soon as possible. And I yield back the balance of my time. 

Chairman HALL. Thank the gentlelady. 

Without objection all members’ opening statements will be placed 

in the record at this point. 

And we will now consider the bill, H.R. 1425, The Creating Jobs 

Through Small Business Innovation Act of 2011. 

Without objection I ask unanimous consent that the bill is considered as read and open to amendment at any point and that 

members proceed with amendments in the order listed on the roster. 

And that is so ordered. 

Chairman HALL. Are there any amendments to the bill? 

Mr. WU. Mr. Chairman, I have an amendment at the desk. 


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Chairman HALL. The first amendment on the roster is offered by 

Mr. Wu. The clerk will report the amendment. 

The CLERK. Amendment number 010, amendment to H.R. 1425, 

offered by Mr. Wu of Oregon. 

Mr. WU. I ask unanimous consent that the amendment be considered as read. 

Chairman HALL. Without objection. 

I ask unanimous consent to dispense with the reading. 

Without objection, I think it is so ordered, and I recognize the 

gentleman for five minutes to explain this. Respect to you, Mr. Wu, 

recognize you for five minutes at this time. 

Mr. WU. Thank you very much, Mr. Chairman, and thank you 

and Chairman Quayle for your work on this legislation, and thank 

Ms. Johnson for her leadership and work on this legislation, and 

Ms. Johnson, thank you specifically for your very kind and generous remarks about my labor for the last five years on this legislation. 

And it is in the spirit of that five-year push that I offer my 

amendment to extend the authorization period from three years to 

five years. I think that some of us have been in that funny place 

in restaurants where it sometimes takes longer for someone to describe, for the server to describe in great detail the benefits or the 

spectacular nature of a particular dish, longer than it takes to actually eat the meal. 

And in this instance I have been working on a reauthorization 

for five years, and we have a three-year reauthorization period, 

which kind of makes me feel like I am in one of those restaurants. 

I think that there is a much more substantive reason to extend the 

reauthorization period and that is that the National Research 

Council report looking at this legislation and making recommendations on it will be due in four years, and a reauthorization at the 

five-year mark would permit us to take that report into consideration when we do the next reauthorization to that rather than, if 

you will, fly by the seat of the pants and do the reauthorization in 

three years. 

In addition, a second strong reason for pushing the reauthorization out by another couple of years is because of the need for certainty by applicants for both phase I and phase II awards. I also 

note that the Senate reauthorization period is currently in their 

bill at eight years. That is down from a 14-year reauthorization period, which they passed in the last two Congresses, and they are 

coming down towards a reasonable period. In my view a reasonable 

five or six-year period, and we have gone up from the two-year period that we, that the House bill had in it in the last Congress, and 

we are currently at three years, and an increase for which I am 

grateful, and I think is commendable. I do think that a five-year 

period is a more useful period and one that will, indeed, in all likelihood be closer to what House and Senate ultimately agree to. 

And for all those reasons, Mr. Chairman, I urge adoption of this 

amendment. 

Chairman HALL. Thank you, Mr. Wu, and I thank you for the 

amendment. I think we debated this in subcommittee. I believe it 

was voted down in subcommittee, and I think the three-year authorization currently provided by H.R. 1425 is appropriate. It proVerDate Mar 15 2010 18:05 Jun 02, 2011 Jkt 099006 PO 00000 Frm 00213 Fmt 6601 Sfmt 6601 E:\HR\OC\HR090P1.XXX HR090P1

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vides a reasonable amount of time to pass but ensures Congress is 

going to keep an eye on some of the changes we are considering 

right today. 

I would like to have the opportunity to consider how these languages have impacted the program three years from now instead 

of five. For these reasons I oppose Mr. Wu’s amendment. 

Mr. WU. Mr. Chairman, if you could yield to me just for one second. 

Chairman HALL. I would yield to the gentleman more than one 

second. 

Mr. WU. I just want to point out that I did not ask for my 

amendment to be voted down in the subcommittee, and I was saving the moment for today. 

Chairman HALL. The chair recognizes that chair made his own 

observation at the subcommittee, and I think the vote was not 

there, and you showed good judgment at that time. I would like 

you to exercise that same judgment now and pull it down, but you 

don’t have to if—is there further discussion? 

All right. Then the vote occurs on the amendment. All in favor, 

say aye. Those opposed, say no. It is my opinion that the no’s have 

it. The amendment is not agreed to. 

Mr. WU. Mr. Chairman, today I do ask for a recorded vote on this 

amendment. 

Chairman HALL. All right. The gentleman asks for a recorded 

vote. 

The clerk will call the roll. 

The CLERK. Chairman Hall? 

Chairman HALL. No. 

The CLERK. Chairman Hall votes no. 

Mr. Sensenbrenner? 

[No response.] 

The CLERK. Mr. Smith? 

Mr. SMITH. No. 

The CLERK. Mr. Smith votes no. 

Mr. Rohrabacher? 

Mr. ROHRABACHER. No. 

The CLERK. Mr. Rohrabacher votes no. 

Mr. Bartlett? 

Mr. BARTLETT. No. 

The CLERK. Mr. Bartlett votes no. 

Mr. Lucas? 

[No response.] 

The CLERK. Mrs. Biggert? 

Mrs. BIGGERT. No. 

The CLERK. Mrs. Biggert votes no. 

Mr. Akin? 

[No response.] 

The CLERK. Mr. Neugebauer? 

[No response.] 

The CLERK. Mr. McCaul? 

[No response.] 

The CLERK. Mr. Broun? 

[No response.] 

The CLERK. Mrs. Adams? 


sroberts on DSK5SPTVN1PROD with HEARING
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Mrs. ADAMS. No. 

The CLERK. Mrs. Adams votes no. 

Mr. Quayle? 

Mr. QUAYLE. No. 

The CLERK. Mr. Quayle votes no. 

Mr. Fleischmann? 

Mr. FLEISCHMANN. No. 

The CLERK. Mr. Fleischmann votes no. 

Mr. Rigell? 

Mr. RIGELL. No. 

The CLERK. Mr. Rigell votes no. 

Mr. Palazzo? 

Mr. PALAZZO. No. 

The CLERK. Mr. Palazzo votes no. 

Mr. Brooks? 

Mr. BROOKS. No. 

The CLERK. Mr. Brooks votes no. 

Mr. Harris? 

Mr. HARRIS. No. 

The CLERK. Mr. Harris votes no. 

Mr. Hultgren? 

[No response.] 

The CLERK. Mr. Cravaack? 

Mr. CRAVAACK. No. 

The CLERK. Mr. Cravaack votes no. 

Mr. Bucshon? 

[No response.] 

The CLERK. Mr. Benishek? 

Mr. BENISHEK. No. 

The CLERK. Mr. Benishek votes no. 

Ms. Johnson? 

Ms. JOHNSON. Aye. 

The CLERK. Ms. Johnson votes aye. 

Mr. Costello? 

[No response.] 

The CLERK. Ms. Woolsey? 

[No response.] 

The CLERK. Ms. Lofgren? 

[No response.] 

The CLERK. Mr. Wu? 

Mr. WU. Aye. 

The CLERK. Mr. Wu votes aye. 

Mr. Miller? 

[No response.] 

The CLERK. Mr. Lipinski? 

[No response.] 

The CLERK. Ms. Giffords? 

[No response.] 

The CLERK. Ms. Edwards? 

Ms. EDWARDS. Aye. 

The CLERK. Ms. Edwards votes aye. 

Ms. Fudge? 

[No response.] 

The CLERK. Mr. Lujan? 


sroberts on DSK5SPTVN1PROD with HEARING
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Mr. LUJAN. Aye. 

The CLERK. Mr. Lujan votes aye. 

Mr. Tonko? 

Mr. TONKO. Aye. 

The CLERK. Mr. Tonko votes aye. 

Mr. McNerney? 

Mr. MCNERNEY. Aye. 

The CLERK. Mr. McNerney votes aye. 

Mr. Sarbanes? 

[No response.] 

The CLERK. Ms. Sewell? 

[No response.] 

The CLERK. Ms. Wilson? 

Ms. WILSON. Aye. 

The CLERK. Ms. Wilson votes aye. 

Mr. Clark? 

[No response.] 

Chairman HALL. Are there others who wish to vote? 

Mr. MCCAUL. Yeah. Mr. Chairman. I would like to be recorded 

as a no. 

The CLERK. Mr. McCaul votes no. 

Chairman HALL. Mr. Costello. 

Mr. COSTELLO. Mr. Chairman, I would like to be recorded as aye. 

The CLERK. Mr. Costello votes aye. 

Chairman HALL. All right. The clerk shall report the vote. 

The CLERK. Mr. Chairman, eight members vote aye, and 15 

members vote no. 

Chairman HALL. This amendment is not agreed to, and on this 

vote there were eight ayes, 15 nos. Amendment is not agreed to. 


sroberts on DSK5SPTVN1PROD with HEARING
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Chairman HALL. You want to be recognized, Ms. Johnson? 

Ms. JOHNSON. Yes. Thank you, Mr. Chairman. I just simply want 

to say that a five-year authorization I thought was appropriate because under the bill the next phase of the National Research Council evaluation of the program is due in four years after enactment, 

and this ends in three years. So it is going to make it a little bit 

more difficult, but providing five years would allow us to take the 

evaluation into consideration when we sit down for reauthorization 

again. 


sroberts on DSK5SPTVN1PROD with HEARINGRC1.eps
218 

I just wanted to point that out. Thank you. 

Chairman HALL. We will take note of that, and we did have a 

roll call vote, so it would put your statements in their proper position and thank you for them. 

Are there any other amendments? 

Mr. WU. Mr. Chairman, I have an amendment at the desk. 

Chairman HALL. For what purpose does the gentleman seek recognition? The next amendment is offered by the gentleman from 

Oregon, Mr. Wu. Are you ready to proceed with your amendment? 

Mr. WU. Yes, sir, I am. 

Chairman HALL. The clerk will report the amendment. 

The CLERK. Amendment number 011, amendment to H.R. 1425, 

offered by Mr. Wu of Oregon. 

Chairman HALL. I ask unanimous consent to dispense with the 

reading. 

Without objection, I think it is so ordered. The gentleman is recognized for five minutes to explain the amendment. 

Mr. WU. Thank you, Mr. Chairman. 

I am offering this amendment to increase award size across the 

board, and in a moment I want to enter in a discussion with the 

majority and with the chairman for the specific reason of or for the 

reason to specifically identify the National Institutes of Health as 

the one agency where it might be especially appropriate to have a 

different award size and to propose something that we can take between here and the House Floor so that we can enter into a discussion with the Senate later on. If we pass the award sizes as we do, 

it would badly infringe on what the NIH is currently doing. As drafted, my amendment raises the award level from $1 mil- lion to $1.5 million. The reason why my amendment is so important for the current legislation is that whether correct or not, the 

SBA has interpreted the caps in the prior legislation as guidelines 

and not as hard caps. We made clear in this legislation that these 

are hard caps, and there is a $1 million cap in the existing bill with 

a 50 percent potential increase to be determined by the agency. 

My amendment would take it to $1.5 million with a 50 percent 

increase as interpreted by the agency. This means that for phase 

II it would, the hard cap at most would be 2.25 million and for 

phase I the hard cap would be $225,000. 

Now, I feel that these are appropriate award levels for all the 

agencies, but for purposes of discussion today I am willing to leave 

that on the—I am willing to leave that behind, and I want to specifically identify the National Institutes of Health as an agency 

where we need to work with them on their judgment of what the 

award sizes ought to be. They have specific expertise in their area, 

health and biologics and pharmaceuticals, and the information, the 

data which I got within the last 24 hours is that at the phase I 

award level of $225,000, 42 percent of the awards that they are 

currently giving would exceed that amount. And if we have a hard 

cap in our bill, which we do, then 42 percent of what they are 

awarding would be eliminated and have to be brought down to the 

$225,000 level. Even at a $450,000 phase I award level, almost 15 

percent of what they are currently awarding exceeds that amount. 

Now, I think that these numbers, we should look further into 

these numbers between now and the time that the bill hits the 


sroberts on DSK5SPTVN1PROD with HEARING
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House Floor and determine whether, as best as we can legislatively, for legislative information, whether the NIH is appropriately 

awarding phase I awards this high. By the way, they award phase 

II awards quite high also. 

But we should be setting a different cap level for NIH, and the 

only question is how high it should be probably different from other 

agencies. They are doing a good job of spinning off biologics and 

pharmaceuticals and other healthcare basic biological technologies. 

We don’t want to inhibit that. 

The two reasons why we should consider this seriously and have 

a different number in the House bill are that we, for the first time 

we have a hard cap in this legislation. The SBA will not be able 

to interpret around us. I believe in that, but the second reason is 

that the Senate bill has the same numbers that we do in the current draft of our bill. We will not have a conferenceable issue if we 

have the exact same numbers. 

To be able to solve this problem in conference or before we have 

to have a different number, and Mr. Chairman, I would like to 

work with you and the majority to make sure that NIH is protected 

in its program in an appropriate way going forward, and that is the 

modified goal of my amendment. I am willing to work with the majority on all the other agencies living within the caps as currently 

proposed in the House and Senate bills. 

Chairman HALL. All right. The gentleman’s time has expired, 

and I thank the gentleman for his amendment, and I understand 

and do really believe it is the gentleman’s intent to ensure that the 

best research is funded. It is genuine. I also recognize that NIH 

has funded a number of projects that exceed the new caps in the 

legislation as he has pointed out. 

However, I think that changing the award size would have a negative implication for the SBIR and STTR Programs. Actually, the 

National Research Council recommended setting the phase II 

award guidelines at 1 million because this strikes the proper balance between providing adequate funding and ensuring broad participation in the program. 

I do oppose the gentleman’s amendment and urge my colleagues 

to do the same. However, it is not all that bad. If Mr. Wu would 

maybe—if I could suggest that he withdraw the amendment and 

ask that we work together on this amendment before the Floor, I 

would probably agree. I am not sure because I am not sure the best 

way to go about this, whether we single out NIH or find another 

means to accommodate that agency, but I am willing to work on 

it. 

Are there others who would like to be heard or would like to recognize Mr. Wu for his feelings about—or do you want to go on and 

take the vote now? What would you like to do, Mr. Wu? 

Mr. WU. Mr. Chairman, I think that the path that you have laid 

out is more than generous. I would like to withdraw the amendment. I have racked my brain as to the best way to do a carve out 

or some other way to handle NIH in the last 24, 36 hours. I think 

we need more time and more information, and I look forward to 

working with you and all the other members of the committee so 

that we can do something appropriate, and I do mean appropriate 

for NIH. 


sroberts on DSK5SPTVN1PROD with HEARING
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Chairman HALL. Actually, I thank the gentleman. I know the 

time and the work that he has put in on this, his sincerity on it. 

I think it probably can be worked out. 

The gentleman withdraws his amendment. 

Let us see. Are there other amendments? 

Mr. TONKO. Mr. Chairman. 

Chairman HALL. All right. Do you have an amendment at the 

desk? 

Mr. TONKO. Yes, Mr. Chairman. I have an amendment at the 

desk. 

Chairman HALL. The next amendment is offered by the gentleman from New York, Mr. Tonko. Are you ready to proceed with 

your amendment, sir? 

Mr. TONKO. I am, Mr. Chair. 

Chairman HALL. The clerk will report the amendment. 

The CLERK. Amendment number 026, amendment to H.R. 1425, 

offered by Mr. Tonko of New York. 

Chairman HALL. I ask unanimous consent to dispense with the 

reading. 

Without objection, it is so ordered. 

I recognize Mr. Tonko on his amendment. 

Mr. TONKO. Thank you, Mr. Chairman. Since its inception in 

1982, the SBIR Program has proven to be one of the most successful federal programs for technological innovation in United States 

history, delivering more than 60,000 patents and hundreds of valuable innovations in agriculture, defense, energy, health sciences, 

homeland security, space, transportation, and other fields. 

The National Research Council of the National Academies 2007, 

report, an assessment of the Small Business Innovation Research 

Program states, and I quote, ‘‘The SBIR Program is sound in concept and effective in practice.’’ The SBIR Program has created a 

competitive entrepreneurial environment in which small, independently-owned businesses can compete and strengthen America’s 

high-tech economy. 

While reauthorization of the SBIR Program is of the utmost importance, certain changes to the current SBIR Program contained 

in today’s bill could in my opinion negatively affect several small 

businesses in our districts by stacking the competition against 

them with larger companies which historically have not been the 

focus of this innovative program. 

The first issue I am concerned with in today’s bill is in Section 

105. The current version of the bill eliminates one of the best tools 

the program has to make sure we are using the taxpayers’ money 

the best way possible. Many members of this committee continue 

to express concern as to how we use federal funds when it comes 

to research and development programs. I share that concern. 

But the way the current bill is written we are creating a loophole 

that would, could waste time and resources for applicants and the 

agencies. Allowing applicants to skip phase I awards and go 

straight to phase II awards should be a cause for concern. 

In a time when both our government and private businesses are 

being forced to do more with less we should be making sure that 

the process for awards does not waste time and resources of the 


sroberts on DSK5SPTVN1PROD with HEARING
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small innovator or the agencies. My amendment addresses this 

concern by striking the language that creates this loophole. 

A fundamental premise of the SBIR Program and the main reason for its success is that it has been structured to invest modestly 

to explore ideas and allow the winners to emerge. The phase I step 

with modest funding is critical to the concept, allowing only the 

strongest ideas to survive in advance. Jumping directly to making 

large awards would squeeze out many innovative ideas that are in 

need of exploration while concentrating on a few that may not pan 

out. 

Therefore, the most important issue in preserving the integrity 

of the SBIR Program is to require a phase I investment before 

jumping to phase II. Phase I of this program is a rigorous process 

involving more than one level of review by staff. A rigorous phase 

I application enables the concept to be properly vetted for relevancy 

to the SBIR Program and the agency. We should be encouraging 

this type of selection process and not allowing it to be simply 

passed by. 

This is an amendment that is simple and straightforward. It 

strikes the language that allows applicants to skip phase I, and I 

urge members of our committee to support this amendment, and I 

yield back the balance of my time. 

Chairman HALL. The gentleman yields back his time. I thank the 

gentleman for his amendment. I understand the arguments to both 

sides of this amendment and the importance to maintain the integrity of the program and encourage greater small business participation, but I hate to vote in the face of the National Research Council 

recommending against allowing companies to apply directly for 

phase II awards. 

Indeed, allowing the companies to apply directly for phase II 

awards can significantly shift the balance of both awards and funding from phase II to phase—from phase I to phase II. This might 

crowd out small start-up businesses that can’t compete directly for 

phase II projects. 

If a company has already conducted the work equivalent to phase 

I on the other side, why should the government pay for this work? 

Again, I understand the arguments on both sides, but I have a 

hard time supporting this. I will be opposing the amendment because I believe it is important to prevent wasteful spending on duplicative projects and to fund the most promising research with the 

most, with the greater potential for commercialization and to line 

up with the National Research Council. 

I will oppose, and I thank the gentleman for his amendment. 

Is there further discussion on the amendment? 

All right. 

Mr. WU. Mr. Chairman. 

Chairman HALL. Yes. Mr. Wu, recognize you for 5 minutes. 

Mr. WU. Thank you very much, Mr. Chairman, and I want to 

recognize that Mr. Tonko has worked very hard on developing his 

expertise in this legislation and has many thoughtful amendments 

to propose today. I do reluctantly oppose this amendment for one 

of the reasons that the chairman cited, which was that the intent 

when we wrote this provision into the legislation was that if the 

private sector has already performed the phase I work, there is no 


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need for the public sector, for the taxpayer to jump in and fund a 

repeat of that work, and it is a step to save money for the taxpayer. 

And in this regard, Mr. Chairman, I am with you in that the 

NRC is advisory to us but ultimately we draw the lines, and I 

think we need to take responsibility for that, and I thank you for 

the opportunity to speak for a moment. 

I have tremendous respect for the gentleman from New York’s 

work on this legislation. 

Chairman HALL. The gentleman’s time has expired, and I want 

to thank the member for the amendment. 

Is there further discussion on the amendment? 

Mr. TONKO. Mr. Chairman, if I might just ask for further clarification. You are citing the academy’s 2007, report, and I believe 

that they recommended not skipping over phase I. They thought 

that it was a critical part of especially the vetting process. 

Chairman HALL. Is there other discussion? 

Okay. Hearing no further discussion the vote will occur on the 

amendment. All in favor, say aye. Those opposed, say no. 

Mr. TONKO. Mr. Chairman. 

Chairman HALL. Yes. 

Mr. TONKO. Could we have a recorded vote, please? 

Chairman HALL. The gentleman asks for a recorded vote. All 

in—recorded vote called for. Would the clerk call the roll? 

The CLERK. Chairman Hall? 

Chairman HALL. No. 

The CLERK. Chairman Hall votes no. 

Mr. Sensenbrenner? 

[No response.] 

The CLERK. Mr. Smith? 

Mr. SMITH. No. 

The CLERK. Mr. Smith votes no. 

Mr. Rohrabacher? 

Mr. ROHRABACHER. No. 

The CLERK. Mr. Rohrabacher votes no. 

Mr. Bartlett? 

Mr. BARTLETT. No. 

The CLERK. Mr. Bartlett votes no. 

Mr. Lucas? 

[No response.] 

The CLERK. Mrs. Biggert? 

Mrs. BIGGERT. No. 

The CLERK. Mrs. Biggert votes no. 

Mr. Akin? 

[No response.] 

The CLERK. Mr. Neugebauer? 

[No response.] 

The CLERK. Mr. McCaul? 

Mr. MCCAUL. No. 

The CLERK. Mr. McCaul votes no. 

Mr. Broun? 

[No response.] 

The CLERK. Mrs. Adams? 

Mrs. ADAMS. No. 

The CLERK. Mrs. Adams votes no. 


sroberts on DSK5SPTVN1PROD with HEARING
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Mr. Quayle? 

Mr. QUAYLE. No. 

The CLERK. Mr. Quayle votes no. 

Mr. Fleischmann? 

Mr. FLEISCHMANN. No. 

The CLERK. Mr. Fleischmann votes no. 

Mr. Rigell? 

Mr. RIGELL. Yes. 

The CLERK. Mr. Rigell votes aye. 

Mr. Palazzo? 

Mr. PALAZZO. No. 

The CLERK. Mr. Palazzo votes no. 

Mr. Brooks? 

Mr. BROOKS. No. 

The CLERK. Mr. Brooks votes no. 

Mr. Harris? 

Mr. HARRIS. No. 

The CLERK. Mr. Harris votes no. 

Mr. Hultgren? 

[No response.] 

The CLERK. Mr. Cravaack? 

Mr. CRAVAACK. No. 

The CLERK. Mr. Cravaack votes no. 

Mr. Bucshon? 

[No response.] 

The CLERK. Mr. Benishek? 

Mr. BENISHEK. No. 

The CLERK. Mr. Benishek votes no. 

Ms. Johnson? 

Ms. JOHNSON. Aye. 

The CLERK. Ms. Johnson votes aye. 

Mr. Costello? 

[No response.] 

The CLERK. Ms. Woolsey? 

[No response.] 

The CLERK. Ms. Lofgren? 

[No response.] 

The CLERK. Mr. Wu? 

Mr. WU. No. 

The CLERK. Mr. Wu votes no. 

Mr. Miller? 

[No response.] 

The CLERK. Mr. Lipinski? 

Mr. LIPINSKI. No. 

The CLERK. Mr. Lipinski votes no. 

Ms. Giffords? 

[No response.] 

The CLERK. Ms. Edwards? 

Ms. EDWARDS. Aye. 

The CLERK. Ms. Edwards votes aye. 

Ms. Fudge? 

[No response.] 

The CLERK. Mr. Lujan? 

Mr. LUJAN. Aye. 


sroberts on DSK5SPTVN1PROD with HEARING
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The CLERK. Mr. Lujan votes aye. 

Mr. Tonko? 

Mr. TONKO. Aye. 

The CLERK. Mr. Tonko votes aye. 

Mr. McNerney? 

Mr. MCNERNEY. No. 

The CLERK. Mr. McNerney votes no. 

Mr. Sarbanes? 

Mr. SARBANES. No. 

The CLERK. Mr. Sarbanes votes no. 

Ms. Sewell? 

Ms. SEWELL. Yes. 

The CLERK. Ms. Sewell votes aye. 

Ms. Wilson? 

Ms. WILSON. Aye. 

The CLERK. Ms. Wilson votes aye. 

Mr. Clark? 

Mr. CLARK. Aye. 

The CLERK. Mr. Clark votes aye. 

Chairman HALL. Are there others members who wish to vote? 

Are there members who wish to change their vote? 

Mr. COSTELLO. Mr. Chairman. 

Chairman HALL. The chair recognizes the gentleman from Illinois. 

Mr. COSTELLO. Costello votes aye. 

The CLERK. Mr. Costello votes aye. 

Chairman HALL. Are there others? 

Mr. Bucshon. 

The CLERK. Mr. Bucshon is not recorded. 

Mr. BUCSHON. No, ma’am. 

The CLERK. Mr. Bucshon votes no. 

Chairman HALL. All right. Are there other members who wish to 

change their vote? 

All right. The clerk will report the vote. 

The CLERK. Mr. Chairman, nine members vote aye, and 19 members vote no. 

Chairman HALL. On this vote there were nine ayes and 19 nos. 

The amendment is not agreed to. 


sroberts on DSK5SPTVN1PROD with HEARING
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Chairman HALL. Are there other amendments? 

Mr. WU. Mr. Chairman, I have an amendment at the desk. 

Chairman HALL. Our next amendment is offered from the gentleman from Oregon, Mr. Wu. Are you ready to proceed with your 

amendment? 

Mr. WU. Yes, sir, I am. 

Chairman HALL. All right. The clerk will report the amendment. 


sroberts on DSK5SPTVN1PROD with HEARINGRC2.eps
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The CLERK. Amendment number 009, amendment to H.R. 1425, 

offered by Mr. Wu of Oregon. 

Chairman HALL. I would ask unanimous consent to dispense 

with the reading. 

Without objection, it is so ordered, and the gentleman is recognized for five minutes to explain his amendment. 

Mr. WU. Thank you very much, Mr. Chairman. 

As drafted the current legislation permits one level of majority 

venture capital VAT companies to participate in the SBIR Program, and for three agencies, the NIH, the NSF, and the—I am 

sorry. The NIH, the NSF, and the DOE to participate at 45 percent 

for venture capital majority-owned companies. 

My amendment would add NASA as the fourth agency to be permitted to have majority venture capital-owned companies at this 

higher level. I believe that this is appropriate, and I believe that 

this is where NASA and the National Space Initiative want to go 

and ought to go. 

As you know, Mr. Chairman, and also the ranking member, 

NASA is winding down a significant amount of its workforce as we 

transition from one form of human spaceflight hopefully to another. 

As this wind down is occurring, at a number of NASA sites around 

the country there have been incubators created, and there are 

strong efforts, sometimes on behalf—by NASA frequently by state 

agencies to encourage small spinouts from NASA based on NASA 

technology. 

I think that we ought to encourage such efforts, not just as an 

effort to create high-wage, private sector jobs, but also as a way of 

maximizing technology and maximizing innovation and helping our 

space program achieve its objectives by permitting a higher level 

of majority venture capital-owned companies to participate I believe that we promote innovation, we promote jobs, and also it 

saves the taxpayers some expenses when venture capitalists do, if 

you will, some of the due diligence that would otherwise have to 

be done by public agencies. It is entirely appropriate that NASA is 

one of the lead science agencies of our Nation, also be included 

with the Department of Energy, NIH, and NSF so that we can take 

larger steps toward an innovation economy and also one that maximizes our participation in space. 

And for all those reasons, Mr. Chairman, I urge adoption of the 

amendment, and I yield back the balance of my time. 

Chairman HALL. The gentleman yields back his time, and I 

thank the ranking member of the Technology and Innovation Subcommittee, for his amendment. I agree that we should add NASA 

to the list of federal agencies that may provide up to 45 percent of 

award funding to firms that have majority venture capital backing. 

This amendment has the potential, I believe, to increase the 

quality of applications NASA receives, which could lead to better 

research and development. I support the amendment and urge my 

colleagues to do the same. 

All right. Is there further discussion on the amendment? 

Ms. EDWARDS. Mr. Chairman. 

Chairman HALL. I recognize Mrs. Edwards, gentlelady. 

Ms. EDWARDS. Thank you, Mr. Chairman. 

Chairman HALL. Maryland. 


sroberts on DSK5SPTVN1PROD with HEARING
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Ms. EDWARDS. Thank you, Mr. Chairman. I am not so much concerned with this amendment that it would add NASA to the list of 

agencies. I am concerned as reflected in Mr. Tonko’s amendment, 

the next one that we will consider, about the percentage. 

And Prince George is in Montgomery County in the fourth Congressional district. Particularly in Montgomery County we are 

home to some of the most nimble, agile, but also small biotech 

firms, and what happens is that with the 45 percent award, the 45 

percent level that many of those firms that are smaller firms, that 

are more nimble, that hire an awful lot of people, they don’t really 

get the same kind of capacity, and I actually think that, you know, 

particularly for an agency like NASA to encourage the greater participation of our smaller businesses our women-owned businesses, 

our minority and veteran-owned businesses, that, you know, indeed, that threshold level at 45 percent really screens them out. 

And so my concern is not so much that, you know, that NASA 

isn’t a full participant in SBIR but that the 45 percent level I think 

does great harm to some of our smaller and more nimble companies. 

And with that I yield. 

Chairman HALL. The gentlelady yields back her time. I would 

only say to that the percentage is a ceiling. It is not a floor, and 

I suggest you talk with the author who may have some concessions 

to make that might solve the problems that you have representing 

your district as you do very well. 

Is there further discussion to the amendment? 

All right. Hearing no further discussion, the vote occurs on the 

amendment. All in favor, say aye. Those opposed, say no. Those opposed say, no. The ayes have it, and the amendment is not agreed 

to. 

The CLERK. It is agreed to. The amendment is agreed to. 

Chairman HALL. I have changed my mind on that. The amendment is agreed to since I have been elbowed here. And, remember, 

I turned 88 years old yesterday. 

All right. Are there other amendments? 

Mr. TONKO. I have an amendment at the desk. 

Chairman HALL. All right. The next amendment is offered by the 

gentleman from New York, Mr. Tonko. Are you ready to proceed 

with your amendment? 

Mr. TONKO. I am, Mr. Chairman, and happy birthday. 

Chairman HALL. Thank you. The clerk will report the amendment. 

The CLERK. Amendment number 027, amendment to H.R. 1425, 

offered by Mr. Tonko of New York. 

Chairman HALL. Ask unanimous consent to dispense with the 

reading. 

Without objection, it is so ordered. 

Mr. TONKO. Mr. Chairman. 

Chairman HALL. The chair recognizes the gentleman for five 

minutes to explain his amendment. 

Mr. TONKO. Thank you. My second amendment is, again, designed to make sure we do not drastically change the fundamental 

purpose of this program. Although I understand the important role 

of venture capital or a VC firm continues to play in the SBIR ProVerDate Mar 15 2010 18:05 Jun 02, 2011 Jkt 099006 PO 00000 Frm 00227 Fmt 6601 Sfmt 6601 E:\HR\OC\HR090P1.XXX HR090P1

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gram, I find it more important to retain the SBIR’s historic and 

proven focus on truly small business. 

At a time when our national unemployment is near nine percent 

we should be promoting any policy we can that creates jobs, especially jobs that strengthen our small business community, the backbone of our economy and the source of 70 percent of new jobs in 

our country. 

My amendment does just that. My amendment reduces the allocation limits for majority-owned VC companies to 25 percent and 

15 percent respectively. This is consistent with the Senate language and allows the program to better target the intended small 

businesses for which this program was originally designed. 

VCs already see significant benefits from the SBIR Program in 

its present form because it is used as a vetting process for their investment decisions to reduce risk. VC investment firms have historically invested in 1 to three percent of all the businesses, business plans that they review, and those are the ones that you believe could produce revenue within fewer than 3 years. 

So the SBIR Program has historically been aimed at true innovation, those bold plans and ideas that are just too risky for VC funding but are potentially game changers. It is that spirit and tradition that has provided the underpinnings of success for this program to date, and in that tradition that we should continue. 

By lowering the allocation levels we will enable the program to 

continue to be successful in meeting the goals that Congress has 

set out for—to be met. 

I urge members of our committee to support this amendment, 

and I yield back, Mr. Chair, the balance of my time. 

Chairman HALL. I thank the gentleman for yielding back, and I 

thank the gentleman for his amendment. And while I recognize the 

gentleman’s desire to limit the amount of funding that goes to majority venture capital-backed firms, I believe it is more important 

to give agencies the flexibility to award funding for the best applications, and actually that is what this bill does. 

The bill enables a greater number of small businesses to compete 

for SBIR and STTR awards while ensuring that a majority of 

awards go to small businesses that don’t have majority venture 

capital backing. 

For that reason I oppose the gentleman’s amendment and urge 

my colleagues to do the same. 

All right. Are there other members who wish to discuss the—— 

Mr. QUAYLE. Mr. Chairman. 

Chairman HALL. Yes. The chair recognizes the gentleman from 

Arizona. 

Mr. QUAYLE. Thank you, Mr. Chairman. I agree with you that 

I am going to oppose this amendment, and during our hearings we 

had a number of different people, definitely small businesses and 

academics who actually have voiced that the VCs actually play a 

pivotal role in actually weeding out some of the potential commercialized successes in the small businesses. And this is, as we have 

said before, is a ceiling and not a floor, and I believe that the VCs 

actually play—will have the better expertise to determine whether 

a company at those stages will be able to be successful in the future. 


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And it also still does make sure that small businesses that are 

not VC backed get the majority of the funding, so I urge my colleagues to oppose this amendment, and I yield back the balance of 

my time. 

Chairman HALL. The gentleman yields back. Are there other 

members who wish to discuss the amendment? 

Mr. WU. Mr. Chairman. 

Chairman HALL. Mr. Wu is recognized for five minutes. 

Mr. WU. Thank you very much, Mr. Chairman, and I want to 

thank Chairman Quayle for his fine work, and it has been a pleasure to work with you on this legislation. And both for Chairman 

Quayle and Chairman Hall you are advocating a position that I 

have advocated in the past, and I want to recognize that and also 

say that when I have pushed for this, it is as an aspiration, because I hope that there are more venture-funded companies. In my 

view they tend to be small companies that have to give away more 

of their equity, they have to give away a higher percentage because 

they are small. And that a lot of the advocates before this committee have it exactly wrong when they are concerned that bigger 

businesses will be venture funded. I disagree. I think they are 

smaller businesses. 

That being said, I also want to recognize that the statistics 

strongly indicate that none of the agencies would be affected by the 

current caps of—the proposed caps of 15 percent and 25 percent. 

So if we set those caps at those levels today, it would in essence 

not have affect on the applicant pool. 

That is one reason. The second reason is that we have negotiated 

this for five years, and it is high time to get it done, and I think 

that the caps as proposed last year at 15 and 25 percent and as 

currently set in the Senate bill at 15 and 25 percent are probably 

what we can get done at this point. 

And while I share with the chairman of the full chairman and 

the chairman of the subcommittee, their aspirations for higher participation by venture capital, I just very much want to get this bill 

done, and for those two reasons I intend to support the gentleman 

from New York’s amendment to set the caps at 15 and 25 percent. 

I yield back the balance of my time. 

Chairman HALL. The gentleman yields back his time. 

Are there others who wish to discuss the amendment? 

All right. Hearing no further discussion, the vote occurs on the 

amendment. All in favor, say aye. All those opposed, say no. 

Mr. TONKO. Mr. Chairman. 

Chairman HALL. Yes. 

Mr. TONKO. I ask for a recorded vote, please. 

Chairman HALL. The gentleman asks for a recorded vote. The recorded vote will be held. The clerk will please call the roll at this 

time. 

The CLERK. Chairman Hall? 

Chairman HALL. No. 

The CLERK. Chairman Hall votes no. 

Mr. Sensenbrenner? 

[No response.] 

The CLERK. Mr. Smith? 

Mr. SMITH. No. 


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The CLERK. Mr. Smith votes no. 

Mr. Rohrabacher? 

Mr. ROHRABACHER. No. 

The CLERK. Mr. Rohrabacher votes no. 

Mr. Bartlett? 

Mr. BARTLETT. No. 

The CLERK. Mr. Bartlett votes no. 

Mr. Lucas? 

[No response.] 

The CLERK. Mrs. Biggert? 

Mrs. BIGGERT. No. 

The CLERK. Mrs. Biggert votes no. 

Mr. Akin? 

[No response.] 

The CLERK. Mr. Neugebauer? 

[No response.] 

The CLERK. Mr. McCaul? 

Mr. MCCAUL. No. 

The CLERK. Mr. McCaul votes no. 

Mr. Broun? 

Dr. BROUN. No. 

The CLERK. Mr. Broun votes no. 

Mrs. Adams? 

Mrs. ADAMS. No. 

The CLERK. Mrs. Adams votes no. 

Mr. Quayle? 

Mr. QUAYLE. No. 

The CLERK. Mr. Quayle votes no. 

Mr. Fleischmann? 

Mr. FLEISCHMANN. No. 

The CLERK. Mr. Fleischmann votes no. 

Mr. Rigell? 

Mr. RIGELL. No. 

The CLERK. Mr. Rigell votes no. 

Mr. Palazzo? 

Mr. PALAZZO. No. 

The CLERK. Mr. Palazzo votes no. 

Mr. Brooks? 

Mr. BROOKS. No. 

The CLERK. Mr. Brooks votes no. 

Mr. Harris? 

Mr. HARRIS. No. 

The CLERK. Mr. Harris votes no. 

Mr. Hultgren? 

[No response.] 

The CLERK. Mr. Cravaack? 

Mr. CRAVAACK. No. 

The CLERK. Mr. Cravaack votes no. 

Mr. Bucshon? 

Mr. BUCSHON. No. 

The CLERK. Mr. Bucshon votes no. 

Mr. Benishek? 

Mr. BENISHEK. Yes. 

The CLERK. Mr. Benishek votes aye. 


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Ms. Johnson? 

Ms. JOHNSON. No. 

The CLERK. Ms. Johnson votes no. 

Mr. Costello? 

Mr. COSTELLO. Aye. 

The CLERK. Mr. Costello votes aye. 

Ms. Woolsey? 

[No response.] 

The CLERK. Ms. Lofgren? 

[No response.] 

The CLERK. Mr. Wu? 

Mr. WU. Aye. 

The CLERK. Mr. Wu votes aye. 

Mr. Miller? 

[No response.] 

The CLERK. Mr. Lipinski? 

Mr. LIPINSKI. Aye. 

The CLERK. Mr. Lipinski votes aye. 

Mrs. Giffords? 

[No response.] 

The CLERK. Mrs. Edwards? 

Ms. EDWARDS. Aye. 

The CLERK. Mrs. Edwards votes aye. 

Mrs. Fudge? 

[No response.] 

The CLERK. Mr. Lujan? 

Mr. LUJAN. No. 

The CLERK. Mr. Lujan votes no. 

Mr. Tonko? 

Mr. TONKO. Aye. 

The CLERK. Mr. Tonko votes aye. 

Mr. McNerney? 

Mr. MCNERNEY. No. 

The CLERK. Mr. McNerney votes no. 

Mr. Sarbanes? 

Mr. SARBANES. Aye. 

The CLERK. Mr. Sarbanes votes aye. 

Ms. Sewell? 

[No response.] 

The CLERK. Ms. Wilson? 

Ms. WILSON. No. 

The CLERK. Ms. Wilson votes no. 

Mr. Clark? 

Mr. CLARK. No. 

The CLERK. Mr. Clark votes no. 

Chairman HALL. Are there others members who wish to vote? 

Are there any members who wish to change their vote? 

Okay. The clerk shall report the vote. 

The CLERK. Mr. Chairman, seven members vote aye, and 21 

members vote no. 

Chairman HALL. All right. The amendment is not agreed to. 


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Chairman HALL. Are there other amendments? 

Mr. TONKO. Mr. Chairman, I have an amendment at the desk. 

Chairman HALL. What purpose is that? You have an amendment 

at the desk. The next amendment is offered by the gentleman from 

New York, Mr. Tonko. Are you ready to proceed with your amendment, sir? 

Mr. TONKO. I am, sir. 

Chairman HALL. The clerk will report the amendment. 


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The CLERK. Amendment number 030, amendment to H.R. 1425, 

offered by Mr. Tonko of New York. 

Chairman HALL. I ask unanimous consent to dispense with the 

reading. 

Without objection, it is so ordered. Recognize the gentleman on 

his amendment. 

Mr. TONKO. Thank you, Mr. Chairman. 

Section 107 as currently written, again, would make drastic 

changes to a program that at its core is an innovation program for 

small business. In its current format Section 107 would open the 

SBIR Program to businesses that are majority based by venture 

capital, hedge funds, and private equity firms with large holdings 

and employees in market share. 

This opening up of the program, which is funded by taxpayers, 

could potentially crowd out small businesses most in need of funding for their innovative work. 

I have a concern that the current language does not accurately 

reflect the way most companies use funding from VCs. We all know 

that one VC firm and others hardly ever make an investment of 

50 percent or more into a single company. One rarely sees a single 

VC firm control more than a 50 percent stake in one company. 

However, what you will see is multiple VC firms taking positions 

of 10 to 20 percent each, which when you total them could equal 

70, 80, or 90 percent ownership of a single company. Under the 

current language that is acceptable. I would argue that if the intent of this bill is to let VC-supported companies have access to 

their program but still allow the founders of the company to have 

control of their company, then we could, we should draft the language in a way that accurately defines how these types of firms 

work and have ownership in small companies. 

My amendment addresses these concerns by saying that the total 

amount of ownership of a company by VCs, hedge funds, or equity 

firms cannot go beyond 50 percent. I believe this amendment gives 

the founders of the small business more bargaining power against 

private sources of funding like VCs. 

According to my own constituents, having the current limit on 

VCs in the SBIR Program has been one of the best tools to keep 

VCs from immediately seizing more than 60 percent of that given 

company. 

I urge members of our committee to support this pro-small business amendment, and I yield back the balance of my time, Mr. 

Chair. 

Chairman HALL. The gentleman yields back his time, and I 

thank the gentleman for his amendment. Actually, I disagree with 

the gentleman’s amendment because for one thing, it would prevent any majority venture capital-backed firm from competing for 

SBIR and STTR awards. 

H.R. 1425 enables majority venture capital-backed firms to compete for a limited percent of awards, which will increase, I think, 

the potential pool of applicants and may result in stronger proposals. 

I oppose the gentleman’s amendment and strongly urge my colleagues to do the same. 

And I want to thank the member for his amendment. 


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Is there further discussion of the amendment? 

All right. Hearing no further discussion, the vote occurs on the 

amendment. All in favor, say aye. Those opposed, say no. Apparently in my opinion the no’s have it, and the amendment is not 

agreed to. 

Are there other amendments? 

Mr. TONKO. Mr. Chair, I have an amendment at the desk. 

Chairman HALL. The next amendment is offered by the gentleman—by the gentleman from New York, Mr. Tonko. Are you 

ready to proceed with your amendment? 

Mr. TONKO. Yes, I am, Mr. Chair. 

Chairman HALL. The clerk will report the amendment. 

The CLERK. Amendment number 028, amendment to H.R. 1425, 

offered by Mr. Tonko of New York. 

Chairman HALL. I ask unanimous consent to dispense with the 

reading. 

Without objection, it is so ordered. I recognize the gentleman on 

his committee—— 

The CLERK. Amendment. 

Chairman HALL. —on his amendment. 

Mr. TONKO. Thank you, Mr. Chair. The purpose of this amendment is to protect the program from being open to foreign-owned 

VC, hedge funds, and equity firms. My amendment simply prevents 

foreign-owned firms from participating in the program. 

We should be doing everything we can to encourage American 

businesses and American investments into an American bit of ideas 

and technologies. After all, we must continue to strive to make it 

in America. We should not be subsidizing foreign capital and outside governments to use federal resources to develop an idea, then 

run back to their company of origin to commercialize that product. 

With limited resources we must prioritize American businesses 

and American growth above foreign-owned companies. This language matches the Senate bill and makes sure that the program 

is targeted at keeping American innovation here at home. 

I urge members of the committee to support his amendment and 

yield back the balance of my time, Mr. Chair. 

Chairman HALL. I thank the gentleman. I have some concerns 

about the gentleman’s amendment. 

First, the bill already prevents businesses with more than 500 

employees from participating in the SBIR and the STTR Programs. 

Second, the companies have to have at least 51 percent U.S. ownership to participate in SBIR and STTR Programs based on existing 

SBA regulations. 

And finally I am concerned that the amendment would prevent 

small businesses from competing for SBIR awards if they are partially owned by a large business, even if the ownership stakes were 

miniscule. 

Again, I have some concerns about this amendment. Would the 

gentleman clarify his intent with the amendment? 

Mr. TONKO. Basically it is to make certain that American investments are given the priority here and that we do not allow it to 

go forward with the foreign investments that might be made from 

foreign-owned VC firms. 


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Chairman HALL. All right. I thank the gentleman. We think that 

is already covered. I will be opposing the amendment and urge my 

colleagues to do the same. 

Are there others who wish to be recognized? 

Mr. RIGELL. Mr. Chairman. 

Chairman HALL. The gentleman is recognized for five minutes. 

Mr. RIGELL. I just have—Mr. Chairman, thank you. I just had 

a question. The point that the gentleman makes I think is an important one, and there seems to be some, at least lack of clarity on 

whether foreign ownership is allowed or not, and it would help me 

to make a better decision if I fully understood the issue. So if either, Mr. Chairman, if you could or the gentleman who presented 

the bill could either—the amendment could provide clarification on 

that, I would be much appreciated on that. Thank you. 

Chairman HALL. I thank Mr. Rigell. I would recognize anyone 

who wants to give further clarification on the bill. 

Hearing none, is there other—are there others to discuss the 

amendment? 

Hearing no further discussion, the vote occurs on the amendment. All in favor, say aye. Those opposed, say no. The no’s have 

it, and the amendment is not agreed to. 

Mr. TONKO. Chairman, I request a recorded vote. 

Chairman HALL. The gentleman requests a recorded vote. The 

clerk will call the roll. 

The CLERK. Chairman Hall? 

Chairman HALL. No. 

The CLERK. Chairman Hall votes no. 

Mr. Sensenbrenner? 

Mr. SENSENBRENNER. No. 

The CLERK. Mr. Sensenbrenner votes no. 

Mr. Smith? 

Mr. SMITH. No. 

The CLERK. Mr. Smith votes no. 

Mr. Rohrabacher? 

Mr. ROHRABACHER. No. 

The CLERK. Mr. Rohrabacher votes no. 

Mr. Bartlett? 

Mr. BARTLETT. No. 

The CLERK. Mr. Bartlett votes no. 

Mr. Lucas? 

[No response.] 

The CLERK. Mrs. Biggert? 

Mrs. BIGGERT. No. 

The CLERK. Mrs. Biggert votes no. 

Mr. Akin? 

[No response.] 

The CLERK. Mr. Neugebauer? 

[No response.] 

The CLERK. Mr. McCaul? 

Mr. MCCAUL. No. 

The CLERK. Mr. McCaul votes no. 

Mr. Broun? 

Dr. BROUN. No. 

The CLERK. Mr. Broun votes no. 


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Mrs. Adams? 

Mrs. ADAMS. No. 

The CLERK. Mrs. Adams votes no. 

Mr. Quayle? 

Mr. QUAYLE. No. 

The CLERK. Mr. Quayle votes no. 

Mr. Fleischmann? 

Mr. FLEISCHMANN. No. 

The CLERK. Mr. Fleischmann votes no. 

Mr. Rigell? 

Mr. RIGELL. No. 

The CLERK. Mr. Rigell votes no. 

Mr. Palazzo? 

Mr. PALAZZO. No. 

The CLERK. Mr. Palazzo votes no. 

Mr. Brooks? 

Mr. BROOKS. No. 

The CLERK. Mr. Brooks votes no. 

Mr. Harris? 

Mr. HARRIS. No. 

The CLERK. Mr. Harris votes no. 

Mr. Hultgren? 

[No response.] 

The CLERK. Mr. Cravaack? 

Mr. CRAVAACK. No. 

The CLERK. Mr. Cravaack votes no. 

Mr. Bucshon? 

Mr. BUCSHON. No. 

The CLERK. Mr. Bucshon votes no. 

Mr. Benishek? 

Mr. BENISHEK. No. 

The CLERK. Mr. Benishek votes no. 

Ms. Johnson? 

Ms. JOHNSON. Aye. 

The CLERK. Ms. Johnson votes aye. 

Mr. Costello? 

Mr. COSTELLO. Aye. 

The CLERK. Mr. Costello votes aye. 

Ms. Woolsey? 

[No response.] 

The CLERK. Ms. Lofgren? 

[No response.] 

The CLERK. Mr. Wu? 

Mr. WU. Aye. 

The CLERK. Mr. Wu votes aye. 

Mr. Miller? 

[No response.] 

The CLERK. Mr. Lipinski? 

Mr. LIPINSKI. Aye. 

The CLERK. Mr. Lipinski votes aye. 

Ms. Giffords? 

[No response.] 

The CLERK. Ms. Edwards? 

Ms. EDWARDS. Aye. 


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The CLERK. Ms. Edwards votes aye. 

Ms. Fudge? 

[No response.] 

The CLERK. Mr. Lujan? 

Mr. LUJAN. Aye. 

The CLERK. Mr. Lujan votes aye. 

Mr. Tonko? 

Mr. TONKO. Aye. 

The CLERK. Mr. Tonko votes aye. 

Mr. McNerney? 

Mr. MCNERNEY. No. 

The CLERK. Mr. McNerney votes no. 

Mr. Sarbanes? 

Mr. SARBANES. Aye. 

The CLERK. Mr. Sarbanes votes aye. 

Ms. Sewell? 

[No response.] 

The CLERK. Ms. Wilson? 

Ms. WILSON. Aye. 

The CLERK. Ms. Wilson votes aye. 

Mr. Clark? 

Mr. CLARK. Aye. 

The CLERK. Mr. Clark votes aye. 

Chairman HALL. The clerk will report the—— 

The CLERK. Mr. Chairman, 10 members vote aye, and 19 members vote no. 

Chairman HALL. All right. The amendment is not agreed to. 


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Chairman HALL. Are there further amendments? 

Mr. SMITH. Mr. Chairman. 

Chairman HALL. The gentleman from—Mr. Smith from Texas. 

Mr. SMITH. Mr. Chairman, I have an amendment at the desk. 

Chairman HALL. All right. The next amendment is offered by the 

gentleman from Texas, Mr. Smith. Are you ready to proceed with 

your amendment? 

Mr. SMITH. Yes, I am, Mr. Chairman. 


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Chairman HALL. The clerk will report the amendment. 

The CLERK. Amendment number 018, amendment to H.R. 1425, 

offered by Mr. Smith of Texas. 

Chairman HALL. I ask unanimous consent to dispense with the 

reading. 

Without objection, it is so ordered. The gentleman is recognized 

for five minutes on his amendment. 

Mr. SMITH. Thank you, Mr. Chairman. This amendment is a direct result of concerns raised by one of my constituents during a 

town meeting a couple of months ago. Maybe this is how democracy 

is supposed to work. 

A Department of Energy laboratory required his small business 

to pay them 90 days up front for a joint research project under a 

Work For Others Agreement. For example, the small business enters into a Work for Others Agreement with an Energy Department 

laboratory for a 12-month effort valued at $240,000. The small 

business could be required to pay $60,000 in advance to meet the 

90-day requirement. 

This rule creates a difficult cash flow situation for typical small 

businesses and makes it harder for them to partner with the national laboratories to bring new technologies into the marketplace. 

I wrote the Department of Energy on behalf of my constituent to 

ask them to reexamine this 90-day policy, and they did, and I want 

to compliment the DOE for changing their regulation from 90 days 

to 60 days for advanced payments. They made this change only two 

weeks after receiving my letter. 

However, I believe that an upfront cash advance of 30 days is a 

more reasonable policy, and that is what my amendment would require for a small business innovative research project. A 30-day 

cash advance from the small business is more in line with how bills 

actually get paid, on a monthly basis. A 30-day advanced payment 

addresses concerns raised by federal agencies about maintaining a 

positive cash balance while also lessening the burden on small 

businesses. 

Small businesses are the engine that drives our economy. Given 

our current fiscal crisis, it is more important than ever that we 

eliminate roadblocks to job creation. This amendment helps achieve 

that goal, and I urge my colleagues to support it and yield back the 

balance of my time. 

Chairman HALL. I thank the gentleman, and I understand that 

you seek to ensure that small businesses are not overburdened by 

the Federal Government regulations that require them to advance 

a great deal of money upfront. At a time when many businesses are 

strapped for cash to operate with, I think the gentleman’s amendment provides some relief for those businesses that will participate 

in the programs of the bill. 

I support this amendment and urge my colleagues to do the 

same. 

Is there any other discussion on the amendment? 

Ms. JOHNSON. Mr. Chairman, I—— 

Chairman HALL. The chair recognizes the gentlelady from Texas. 

Ms. JOHNSON. Thank you, Mr. Chairman. I support the intent of 

this amendment. We do need to do all we can to encourage small 

businesses to team up with our national labs. The scientists and 


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engineers in our national labs represent a tremendous resource and 

expertise that will further the ingenuity of our small businesses, 

and I applaud the gentleman for offering this amendment. 

Thank you. 

Chairman HALL. The gentlelady yields back her time, and I want 

to thank the amendment and the member for this amendment. 

Is there further discussion on the amendment? 

Hearing none, all in favor, say aye. Those opposed, say no. The 

ayes have it, and the amendment is agreed to. 

Are there other amendments? 

Mr. LUJAN. Mr. Chairman, I have an amendment at the desk. 

Chairman HALL. Our next amendment is offered from the gentleman from New Mexico, Mr. Lujan. Are you ready to proceed with 

your amendment? 

Mr. LUJAN. I am, Mr. Chairman. 

Chairman HALL. The clerk will report the amendment. 

The CLERK. Amendment number 016, amendment to H.R. 1425, 

offered by Mr. Lujan of New Mexico. 

Chairman HALL. I ask unanimous consent to dispense with the 

reading. 

Without objection, it is so ordered. 

Mr. LUJAN. Thank you, Mr. Chairman. This—— 

Chairman HALL. The gentleman is recognized for five minutes to 

explain his amendment. 

Mr. LUJAN. Thank you, Mr. Chairman. This amendment would 

increase the set-aside amount to STTR over three years. I am introducing this amendment to help bridge the divide separating 

small businesses from our R&D institutions. 

Over the years the private sector has become increasingly isolated from our research institutions like universities and our national labs. This does not serve our Nation well. It reduces the 

main commercial advantage of funding and performing basic research in the country. Other countries are taking our R&D output 

and turning new scientific discoveries and newly-developed technological capabilities into new businesses and new products. 

We need to remove the isolation of these two communities in 

order for the U.S. to be more competitive. STTR requires partnerships between small businesses and research institutions and 

would encourage these relationships, which is why I think STTR 

Programs need to be increased. 

Furthermore, this amendment makes economic sense as it would 

yield higher commercialization output. At the hearing the Technology and Innovation Subcommittee held a few weeks ago Professor Siegel testified that studies have shown that a university 

connection to an SBIR project substantially increases the likelihood 

of successful commercialization. 

So by putting more funds into STTR projects which require such 

partnerships we’ll be positioning the SBIR and STTR portfolio to 

generate more jobs and a better economy. 

As we truly understand, Mr. Chairman, the importance of 

partnering up small businesses with the research and development 

capabilities and capacity of the United States, especially those the 

engineers most talented in our Nation with our universities and 

national labs. It is incumbent that we truly look to programs that 


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have shown some success and that really positioned U.S. companies to take advantage of a technological revolution that we need 

to reinvigorate with the United States. 

With that, Mr. Chairman, I urge the adoption of this amendment. 

Chairman HALL. The gentleman yields back his time. I thank the 

gentleman for his amendment. I am concerned that the gentleman’s amendment increases the size of the STTR Program by 100 

percent over the course of three years. Growing the program from 

approximately 800 million a year to 1.6 billion a year at a time 

when most agencies’ programs are facing flat budgets, an additional 800 million would be taken from the extramural research 

budgets of our federal agencies. 

I am just not confident this big change is justified by any data 

that we have, current have for the STTR Program. Therefore, I 

must oppose the gentleman’s amendment. 

Is there other discussion? 

Hearing no further discussion, the vote occurs on the amendment. All in favor, say aye. Those who oppose, say no. In the opinion of the chair the no’s have it. The no’s have it, and the amendment is not agreed to. 

Are there other amendments? 

Mr. MR. TONKO. Yes, Mr. Chairman. I have an amendment at 

the desk. 

Chairman HALL. The next amendment is offered by the gentleman from New York, Mr. Tonko. Are you ready to proceed with 

your amendment? 

Mr. TONKO. I am, Mr. Chairman. 

Chairman HALL. The clerk will report the amendment. 

The CLERK. Amendment number 029, amendment to H.R. 1425, 

offered by Mr. Tonko of New York. 

Chairman HALL. I ask unanimous consent to dispense with the 

reading. 

Without objection, it is so ordered. The gentleman is recognized 

for five minutes to explain his amendment. 

Mr. TONKO. Thank you, Mr. Chairman. The intent of this amendment is to make certain that phase II recipients can continue to 

use state and local organizations for commercialization assistance. 

It also ensures that they are aware that this flexibility is still 

possible even if agencies choose to contract with a national vendor 

for these services. It is my belief that state and local representatives are generally in a better position to assist companies through 

commercialization than a national contractor which may not be 

aware of the commercialization support services that are supported 

by and available through state technology-based economic development programs. 

State and local representatives can also introduce companies to 

other sources of collaboration and many other aspects required on 

that path to commercialization. 

While I believe that the flexibility language in this section allows 

recipients to exercise this option, I am still concerned that they 

may not be aware of these options. 

However, I understand that there is a concern about the best 

way to address this issue and that the current amendment might 


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not be the best solution. Mr. Chairman, I know that staffs have 

been talking, and if you would be willing to work with my office 

to address this issue, I would consider withdrawing the amendment. 

Chairman HALL. I thank the gentleman, and I think the goal of 

the amendment was to ensure the state-based organizations with 

expertise and commercializations are able to support small businesses who have received SBIR awards, and I do certainly agree 

to work with you, and I think you have a good thrust, and we 

will—I certainly personally will, and I think this side of the docket 

will work. 

And I accept the fact that you withdraw the amendment at this 

time. 

Mr. TONKO. Yes, Mr. Chairman. 

Chairman HALL. We will work together at a later time. 

Mr. TONKO. Absolutely. I move to withdraw the amendment. 

Chairman HALL. The amendment is withdrawn. 

Are there other amendments? 

Mr. TONKO. Thank you. 

Chairman HALL. Thank you, sir. 

Ms. JOHNSON. Mr. Chairman, I have an amendment at the desk. 

Chairman HALL. The next amendment is offered by the gentlewoman from Texas, Mrs. Johnson. Are you ready to proceed with 

your amendment? 

Ms. JOHNSON. Yes, Mr. Chairman. 

Chairman HALL. All right. The clerk will report the amendment. 

The CLERK. Amendment number 031, amendment to H.R. 1425, 

offered by Ms. Eddie Bernice Johnson of Texas. 

Chairman HALL. I ask unanimous consent to dispense with the 

reading. 

Without objection, it is so ordered. The chair recognizes Mrs. 

Johnson on her amendment. 

Ms. JOHNSON. Thank you, Mr. Chairman. I am offering this 

amendment today along with Congresswoman Wilson, and will ensure—this will ensure that the agencies participating in the SBIR 

Program have the resources they need to conduct the necessary 

outreach activities. 

As we all know, the SBIR Program is an important program for 

fueling technological innovation and spurring job creation. I believe 

that innovation can come from anywhere and that all small businesses, not just a small subset of small businesses, are capable of 

developing new technologies, and I think that our chances of getting game-changing innovation are significantly increased if SBIR 

applicant pool is larger and more diverse. 

For these reasons I believe we need to do a better job of reaching 

out to small businesses that have traditionally been under-represented in this program. This amendment does just that. It provides the SBIR agencies with the resources they need to conduct 

outreach to small businesses and geographical areas that have 

been under-represented in the program, including rural areas and 

areas with unemployment rates that exceed the national average. 

And it facilitates outreach to small businesses owned by women, 

minorities, and veterans. 


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This amendment takes important substantive steps towards ensuring that SBIR Program is available and accessible to all small 

businesses in the country. And in addition, as many of you are 

aware, one of the four stated Congressional objectives of SBIR Program is to increase participation by women and minority-owned 

businesses. This certainly has not been achieved. 

In its 2008 evaluation of the program, the National Research 

Council found that the program was having serious problems 

achieving this objective. It recommended that the targeted outreach 

be developed to improve the participation rates of women and minority-owned small businesses. This amendment follows through on 

its NRC recommendation. 

And I just want to take a moment to clarify a few points about 

this amendment. It is cost neutral. Congresswoman Wilson offered 

a very reasonable outreach amendment at the subcommittee markup based on a provision that was included in the bipartisan House 

Bill from last Congress. That amendment was rejected on a party 

line vote based on negligible costs associated with the program. 

Based on the feedback received at the subcommittee markup, we 

developed a cost-neutral proposal. This does not include a mandate 

for agencies to spend money on outreach. Only those agencies that 

choose to participate in the Administrative and Oversight Expenses 

Pilot Program will be required to set aside some money for these 

activities. 

The amendment also includes a waiver which allows SBA to exempt an agency from the requirement if it is appropriate and necessary to do so. While language was added at the subcommittee 

markup to encourage applications from the under-represented 

small businesses, I firmly believe that we need to take our outreach 

efforts beyond a mere encouragement. 

If we truly are committed to the stated Congressional goal of increasing participation by under-represented groups in the SBIR 

Program, we need to provide agencies with a formal mechanism to 

conduct outreach and technical assistance and give them the resources to do it. 

Chairman Hall, as you know, this is a very important issue to 

me, and it should be an important issue to all the members of this 

committee. This amendment is motivated by nothing but the best 

intentions and represents a good faith attempt by me and Ms. Wilson to address the outreach challenges and to be as responsive as 

possible to concerns we heard from the other side of the aisle in 

the subcommittee markup. 

And so I do urge you to consider the adoption of this amendment, 

and I yield back the balance of my time. 

Chairman HALL. Thank the gentlelady. She yields back the balance of her time, and the chair thanks the gentlewoman from 

Texas for her amendment. 

The bill provides agencies the ability I guess for the first time 

to use some of their program funding to support outreach and other 

administrative activities, and I like the way the bill is currently 

worded, allowing agencies the ability to choose how these funds 

might be used. 

Each year an agency could change how it wanted to spend. If it 

needed to look into some fraud allegations, it could do that. If it 


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needed to provide targeted outreach to a certain group, it could 

that, and if it really wanted to boost commercialization outreach, 

it probably could do that as well. Or it could do a little bit of all 

of it. 

However, I have some problems, and I am inclined to oppose the 

ranking member’s amendment because it would require a certain 

amount of funding to always go towards outreach to certain specific 

groups. 

And another thing, there are others that ought to be added to 

those groups, and I think outreach is important, but I don’t like 

making it mandatory when it is already permitted. Unless we could 

work together and make some changes on this, and we have discussed this personally. I wanted instead of ‘‘shall’’, ‘‘may’’ go to 

those groups, and if we have specific groups, there would be some 

groups that I would like to add to that group. 

If the gentlelady wants to do that, or you can have the alternative that we can have the roll call vote as you choose. 

Ms. JOHNSON. Mr. Chairman, this is too important to just shaft 

it I think, so I would love to work with you for some acceptable 

wording. I would like to know the additional groups you want to 

add. 

Chairman HALL. Specifically I want to add the Disabled Veterans, and they have been turned down in other—— 

Ms. JOHNSON. We do have veterans listed. You want to add the 

word disabled? 

Chairman HALL. And other disabled groups. 

Ms. JOHNSON. That is acceptable to me to add disabled groups. 

I know that the intent is not yours, but it is the intent of the behavior behind whoever it is is to just kind of push this aside. This 

was one of the original intents of this legislation, and out of the 

spirit of attempting to be cooperative, I am going to agree to work 

with you on any final wording of this provision. 

I don’t think that my amendment is unreasonable, but I am willing to work with you and whoever is pushing you to make this 

more acceptable. 

Chairman HALL. It is just the things we discussed that I don’t 

like making it mandatory actually when it is already permitted, 

but I would listen to others. 

Are there others who want to be heard? 

Now, what is your request, Ms. Johnson? That we pull it down 

and work together on it as we go, or do you want to—— 

Ms. JOHNSON. Yes, we can do that. 

Chairman HALL. Do you want to have further discussion at this 

time? 

Ms. JOHNSON. Well, if anybody else wants to have discussion, I 

have no objection to that. 

Chairman HALL. Mr. Rohrabacher, the chair recognizes you for 

five minutes. 

Mr. ROHRABACHER. Mr. Chairman, I join with you in your commitment to making sure if there is a list that the list be a little 

bit more comprehensive than what was being presented. 

I would suggest that people with disabilities, I know there is a 

company in my district, the Sara Corporation, that is run by a man 

who is in a wheelchair, a paraplegic, and he has had to overcome 


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great obstacles to the success of his small business. And it is a research company that falls really within the arena of what we are 

talking about today, and I am very proud to have worked with him 

in the past and certainly I would think if we make a list, which 

is a big question, should we have lists of people of who specifically 

to reach out to rather than just trying to say we are going to be 

fair to everybody, certainly people with disabilities should be on 

that list, and I have an amendment to that effect that would be the 

last amendment today, which may or may not be necessary, depending on your discussion at this moment. 

Thank you. 

Chairman HALL. Would the gentleman—— 

Mr. ROHRABACHER. Yield back. 

Chairman HALL.—yield back? I guess we want to be positive that 

it is permissible and not mandatory. Does that—— 

Ms. WILSON. Mr. Chairman. 

Chairman HALL. Or do you want to work toward a solution? 

Ms. JOHNSON. Well, Mr. Chairman, I would like to work toward 

a solution if it is just permissible, that is permissible now, and that 

hadn’t brought the results that this recent legislation had intended. 

I have no problem with having Mr. Rohrabacher’s amendment 

which adds to women, minorities, veterans, disabled, and who else? 

And 501, I mean, 504, which is access for disabled persons. 

Chairman HALL. I still have the problem with being mandatory. 

If it is ‘‘may’’ instead of ‘‘shall’’, I would withdraw my opposition 

to it, but if it is not, well, then the board could vote, the committee 

could vote on it. 

Mr. MCNERNEY. Mr. Chairman. 

Chairman HALL. Yes, sir. 

Mr. MCNERNEY. Maybe you would recognize. 

Chairman HALL. The chair recognizes the gentleman. 

Mr. MCNERNEY. Well, I certainly appreciate your sentiment 

about including disabled veterans, very important, and other 

groups that might need help, but I must stick with the ranking 

member on the mandatory part of this. If it is just, if it is not mandatory, people aren’t going to do it, and I think the mandatory part 

will—it has shown, it has been shown to be effective. There is 

groups that will be impacted, and I strongly urge my colleagues to 

consider how important it is to outreach to groups that may need 

help getting into the program. 

With that I yield back. 

Chairman HALL. I thank the gentleman. This committee has 

gone through bills where we attempted to add disabled groups, and 

they were turned down. I just think it is so important that they 

not eliminate of all the groups in the world, particularly at a day 

and time like this, disabled veterans who might want to apply. 

So if—— 

Ms. WILSON. Mr. Chairman. 

Chairman HALL. What is the gentlelady’s wishes? 

Ms. WILSON. Mr. Chair. 

Chairman HALL. Ms. Wilson, the chair recognizes Ms. Wilson. 

Ms. WILSON. Thank you, Mr. Chairman, and thank you, Ranking 

Member Johnson. 


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I appreciate the opportunity to speak today, but I must say that 

I am disappointed. I am disappointed that we could not resolve this 

issue at the subcommittee level before a full committee markup, 

and I will be more disappointed still if we cannot pass this amendment today. 

Three weeks ago in the subcommittee markup of this bill I offered an amendment similar to the one we are discussing now. It 

was simple. It was eight pages of identical text, word for word, that 

was included in last year’s reauthorization of the SBIR and STTR 

Programs, reauthorization that passed the House easily by 300 to 

86, 41 vote. We all came to serve in the 112th Congress to create 

jobs, jobs, jobs. This is the Nation’s number one issue. 

I was shocked to find out given the non-controversial nature of 

last year’s bill that a significant portion of it was eliminated before 

we even heard it this year. Particularly the section establishing an 

outreach program at the Small Business Administration that would 

attract small businesses owned and controlled by women and minorities into the SBIR and STTR Programs. 

To remedy that I offered my amendment in subcommittee that 

reinserted the deleted text from last year’s bill. The only concern 

I heard voiced before my amendment was voted down across partisan lines in subcommittee was that it was not revenue neutral. 

Well, I am back. 

Ms. Johnson and I have solved that problem together, and we 

have come here today to ask your support for this amendment. 

This amendment achieves the same goal as the program that was 

eliminated from last year’s bill, and it does so in a revenue neutral 

way. 

This is an important program. One of the stated objectives of the 

SBIR Program is to foster the participation of women and minorityowned firms and technological innovation. Unfortunately, a 2008 

assessment of the program by the National Research Council 

showed that federal agencies involved in the SBIR have not been 

successful in meeting this goal. At the National Science Foundation 

the number of women-owned businesses receiving awards has remained flat for the past several years. Results when analyzing minority-owned firms receiving SBIR funds are even more troubling. 

Awards have stagnated across every agency, and at DOD the 

number has actually declined over time. This amendment here 

today addresses these concerns. It helps the SBIR Program meet 

its objectives; jobs, jobs, jobs. 

Small businesses serve a vital role in our community. They are 

innovative and more often than not the principle source of new 

jobs. You never know where the next big idea will come from, and 

we must all do what we can to support the innovative potential of 

all small businesses, and an innovative potential within all of our 

communities. 

To not approve this amendment would ignore and disenfranchise 

an important segment of our communities. It would deny access to 

jobs for those in rural areas, transportation-challenged communities, grandmothers, young people. All of us need jobs. My district 

has an unemployment rate that exceeds the national unemployment rate. Anything that we can do to help create jobs I would appreciate it. 


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I urge you to support this amendment. Jobs, jobs, jobs. 

Thank you, Ms. Johnson, and thank you, Mr. Chair. 

Chairman HALL. The gentlelady yield back her time. 

We are needing to get on closer to a vote on this. Is there anyone 

else? I don’t want to deny anybody the right to speak. 

Ms. JOHNSON. Yes, Mr. Chairman. 

Chairman HALL. I recognize the gentlelady from Texas. 

Ms. JOHNSON. As we have discussed this this morning, it is my 

great intent to do all I can to work with you, Mr. Chair, as the 

leader of this committee, but the more I think about it the more 

it is very difficult for me to put language in here that means nothing. 

We either want to do it, or we do not want to do it. It is not— 

it doesn’t take a rocket scientist to understand the intent of this 

bill and all we are trying to do is reach that intent so it can be 

meaningful to this Nation. 

So I would just simply ask for an up or down vote on the amendment as submitted. 

Chairman HALL. All right. The gentlelady yield back her time. 

Mr. WU. Mr. Chairman. 

Chairman HALL. Yes. Who seeks? 

Mr. WU. Mr. Chairman. 

Chairman HALL. Mr. Wu. 

Mr. WU. Thank you very much. 

Chairman HALL. The chair recognizes you for five minutes. 

Mr. WU. Thank you very much. Now that it is clear that our 

ranking member intends to seek a recorded vote, I do want to 

speak on this before we vote. 

It is very important. I have not always been a strong proponent 

of such provisions, but I want to speak very strongly on behalf of 

the gentlelady’s proposal. 

First of all, it is revenue neutral, which was the primary objection which was raised at the subcommittee level, and that concern 

has been addressed. 

More importantly, I take it as good faith that it has been explained to me that there are members of the majority who are concerned that a list of some individuals necessarily excludes other individuals, other groups, and I understand that. And why should we 

pick out some groups. 

This is one of those fairness questions which is very difficult to 

address, but I have come to terms with this in the following way. 

It is not that we pick out some groups at the disadvantage of others, but historically is the case that some programs and some subcultures, if you will, some business communities, some professions, 

have been going to certain groups and not others. 

And I don’t necessarily think of this as any mal-intent. There 

may be, and I don’t think there is any bad intent on the part of 

anyone in the development of these patterns. 

What tends to happen is human nature. We look for people who 

are roughly like us or even if not intentionally doing that, we travel 

in certain circles, and when we look for folks, we tend to find folks 

in those circles. It is not a bad intent. It is human nature. That 

is how personal habit, business practice, professional practice tends 

to work. 


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It is uncomfortable to push outside of those circles, and that is 

true of all of us. I think the gentlelady’s amendment, like other efforts like it, in its best sense is a strong effort to push us just a 

little bit beyond our standard comfort levels so that we will reach 

out to folks who have not been historically included. And once they 

are included, then even if we revert to those very human comfort 

levels, at least a few more groups have been included, even if we 

drop those provisions in the future. 

I think that is very, very important, and for those reasons I intend to support the gentlelady’s amendment today. I do wish that 

the ranking member and the chairman could work this out, but it 

seems like we are at logger heads, and well, I yield back the balance of my time. 

Mr. CRAVAACK. Mr. Chairman. 

Chairman HALL. The gentleman yields back. 

Who seeks recognition? 

Mr. CRAVAACK. Mr. Chairman, Chip Cravaack, Minnesota, sir. 

Chairman HALL. Mr. Cravaack. 

Mr. CRAVAACK. Point of question. Does the current amendment 

in its current form exclude disabled American veterans? 

Chairman HALL. It includes all veterans. It doesn’t specify disabled. We went through that situation with the Competes bill, and 

they sent that to the Senate and they took disabled veterans out 

and sent it back. And we tried to work with them. At that time we 

were told we won, and I don’t want to get into that but we don’t 

want to go for a mandatory solution here. We are not denying anything. I prefer to retain full agency flexibility but not mandatory 

oversight. We have a philosophical difference here about how best 

to encourage outreach, and I am willing to let it go to a vote. 

Mr. QUAYLE. Mr. Chairman? 

Chairman HALL. The gentleman from Arizona? 

Mr. QUAYLE. Mr. Chairman, thank you very much. 

Mr. CRAVAACK. I yield back my time, sir. Thank you. 

Mr. QUAYLE. The Ranking member and the gentlelady from Florida have laudable goals for increased participation for those groups 

that are underrepresented in the SBIR and STTR programs. And 

during the Subcommittee hearings and markups that we had, one 

of the things with the gentlelady from Florida’s amendment that 

we did have a problem was that it wasn’t revenue neutral. Now it 

is changed. It is revenue neutral, but it does have these mandates 

on the agencies that I am not comfortable with. And I think Chairman Hall really elucidated on that subject because we don’t want 

the agencies to have to be basically hamstrung to be told how they 

use their administrative budgets accordingly. I think that they 

should be able to have the flexibility to address their concerns how 

they best see. And I think that the goals of this are good, and that 

is why we already have in the legislation where we require federal 

agencies to encourage applications from companies who have been 

historically underrepresented in the SBIR and STTR programs. So 

I will be opposing this amendment, but I do understand the Ranking Member’s position and the gentlelady’s from Florida. I just fundamentally disagree with it. Thank you. I yield back. 

Ms. JOHNSON. Could I just ask for some clarification? 


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Chairman HALL. I recognize you for as much as you have to use 

of five minutes. 

Ms. JOHNSON. Thank you very much. The last thing I want to do 

is be an irritant, but I do feel very strongly that opportunities are 

noticed. This does nothing but request that they make an effort for 

outreach. It does not mandate to do anything as a result of that 

unless they find of course that through oversight there has not 

been an opportunity. It goes to the grain of many people to offer 

equal opportunity. I understand that. But historically in this Nation, it has been a real strong pattern that opportunities have not 

been offered and outreach has not been made, and that is all this 

does. It does not mandate that they do anything but be sensitive 

to it and offer that opportunity. Of course there are some who still 

might object to that, but the intent, the original intent of this legislation, that was a basic intent. And you know, there are a lot of 

things I do not understand, and I will admit to that. I do not understand the objection to this amendment. But I feel negligent if 

I do not call attention to the intent that this legislation set out to 

do and that was to be inclusive. 

Mr. QUAYLE. Will the gentlelady yield for—— 

Ms. JOHNSON. Yes, I will yield. 

Mr. QUAYLE. I just have a question. If it’s not a mandate, then 

you shouldn’t have any objection to the Chairman’s changing of the 

word from shall to may. 

Ms. JOHNSON. The difference is it is a waste of language to put 

it in here to me. They may do that now. This is a reminder that 

they shall make an opportunity to notice it. 

Mr. QUAYLE. Will the gentlelady yield? 

Ms. JOHNSON. Yes. 

Mr. QUAYLE. But if it isn’t a mandate, a ‘‘shall’’ is a mandate. 

A ‘‘may’’ is not a mandate. So if it is not a mandate—— 

Ms. JOHNSON. Sir, let me just point this out. For 38 years I have 

been in public service, and I do know the difference between ‘‘shall’’ 

and ‘‘may’’. May is always out there, whether it is written or not. 

May has ruled this Nation. ‘‘May’’ has been an opportunity for anybody to do anything they wanted to do. But it has not happened 

under ‘‘may’’. And that is the only reason why ‘‘shall’’ reaches for 

opportunities for outreach is put here. It doesn’t say you have got 

to give these people anything. But it does sensitize an agency to 

be sure that they have looked at it, and that is all it does. And if 

you look at the history of all of this, you know—I don’t play with 

this stuff and I don’t do this for the purpose of trying to be insulting. It is a factual thing that women, minorities, veterans have not 

been included. Perhaps they are not assertive enough, and many 

of them are not assertive because they never had the opportunity. 

But if there is an extra sheet of paper put there saying, you know, 

this is open to you, then that is outreach. They frequently do put 

newspaper announcements. Many of them are putting a statement 

of equal opportunity, and that is usually enough. When people feel 

there is an equal opportunity, they will apply. If they don’t, take 

it from me, I am a 75-year-old black woman, and if I feel I am 

going to be insulted, I pass it on by. But if I think there is an equal 

opportunity and I can qualify, I might seek it. That is all this does. 

I am from Waco, Texas. I understand all this. I have lived it. 


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Mr. WU. Will the gentlelady yield for—— 

Ms. JOHNSON. Yes. 

Mr. WU. With the consent of the Ranking Member, I would like 

to offer a second-degree amendment to the gentlelady’s amendment 

and include the words ‘‘persons with disabilities’’ to the gentlelady’s 

amendment. 

Ms. JOHNSON. That is accepted. I just said that to Mr. Rohrabacher. I have no objection to anybody who has been overlooked 

to get a notice that they are welcome to apply. 

Mr. ROHRABACHER. Mr. Chairman? 

Chairman HALL. The gentlelady’s time has expired several 

times—— 

Ms. JOHNSON. If I need some more—— 

Chairman HALL. And I am going to give it to you, too, if you ask 

for it. Mr. Rohrabacher is recognized. 

Mr. ROHRABACHER. Well, just to make my position clear, I personally and philosophically believe that such lists are not consistent with the way I think we should have honest and open government and fair government. Making lists of specific people is 

wrong because there are a lot of people who are suffering in this 

country and struggling in this country, and we should not be looking, reaching out to them, based on their race or their sex or anything else. 

Now, somebody with disabilities can be of any sex and any race, 

and the fact is we know that someone with a disability we absolutely are aware that that person has gone through struggles. But 

when you try to say we should reach out to people and put on a 

list of those people who are of a certain race or are female as compared to male, we may be reaching out to people who have absolute 

benefits and actually have an advantageous position over other 

people who are struggling to get those same contracts. 

I mean, if you have a situation where someone comes from a very 

poor family and has struggled all their life but you are going to 

reach out to someone else because they happen to be of a minority 

race but their family is very wealthy, what we are doing is giving 

the advantaged person an even more advantage. And that is why 

it is not proper to go about making racially based decisions. If we 

have lists, we might as well just have a list and bring it down to 

what is really meant here. We can reach out to anybody but white 

males. 

Ms. JOHNSON. Would the gentleman yield? 

Mr. ROHRABACHER. Not quite yet. Let me finish my point. I will 

be happy to. Why don’t we just eliminate all this extra verbiage 

and just say that we want the government to reach out to everybody except white males? Why we wouldn’t do that, because it 

would obviously be racist. Well, it is racist to do this in the first 

place. My recommendation was people with disabilities because we 

know that whoever is being helped is someone who actually has 

gone through a personal life struggle, but we don’t know whether 

they are black Americans or Hispanic Americans or whatever. They 

could come from very wealthy families in competition with a white 

male who maybe came from a very deprived family. 

Ms. JOHNSON. Will the gentleman yield? 

Mr. ROHRABACHER. Yes, I certainly will. Go right ahead. 


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Ms. JOHNSON. Mr. Chairman—— 

Chairman HALL. Do you yield to the gentlelady? 

Mr. ROHRABACHER. Yes, I did. 

Chairman HALL. All right. The gentleman yields. I think you 

have about 1–1/2 minutes left. 

Ms. JOHNSON. Okay. I will try to be brief. I never wanted this 

to come to the point of this kind of discussion, but it probably is 

necessary. And this does not mean to reach out to everybody but 

white males, but there are a lot of white males that are disabled 

and veterans. However, if you look at this history of this Nation, 

it wouldn’t have to be any outreach if there was anything but white 

males getting these opportunities. This is only a way of saying 

make an opportunity, but let the people other than white males 

and white males, too, because they already know that is who is getting it, to let them know that they can take advantage of these programs. 

It is amazing to me, absolutely incredibly amazing, why this 

came to this point. It reinforces why we need it in the first place. 

But the more I see the resistance, the more it concerns me that 

somewhere in this Committee we have lost track of what this legislation was ever meant to be. But nonetheless, thank you, Mr. Rohrabacher. We have served on this Committee together in the 19th 

year, and this is the first time we have gotten into a discussion 

where we had to talk about white males versus the rest of the 

world. Thank you. 

Chairman HALL. The gentlelady yields back her time. Does the 

gentleman from California yield back your time? 

Mr. ROHRABACHER. Well, let me just note that at no point do I 

ever suggest that it is acceptable to judge people by their race, and 

whatever one’s definition of racism is, it has to be including people 

who would judge others by their race. I yield back the balance of 

my time. 

Chairman HALL. The gentleman yields back his time. 

Mr. LUJAN. Mr. Chairman. 

Chairman HALL. Who seeks recognition? The gentleman from Arizona? 

Mr. LUJAN. From New Mexico, Mr. Chairman. 

Chairman HALL. All right, recognizes—we have a vote on and we 

have discussed this thing and discussed it, but I would like to hear 

from you if you would quickly give us a 5-minute answer in about 

2 minutes. 

Mr. LUJAN. Mr. Chairman, I appreciate that. I would like to ask 

unanimous consent to accept Mr. Wu’s secondary amendment. 

Chairman HALL. Excuse me. Go ahead, sir. 

Mr. LUJAN. Mr. Chairman, I would like to ask unanimous consent—— 

Chairman HALL. You have more than five minutes now. We don’t 

have a vote on I am told. 

Mr. LUJAN. Mr. Chairman, I would like to ask unanimous consent that we accept Mr. Wu’s secondary amendment. 

Chairman HALL. Is there objection? I have no objection to his 

secondary amendment. 

Mr. LUJAN. Thank you, Mr. Chairman. 


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Chairman HALL. Is there objection? Does the Chair hear objection? Chair hears none. 

Mr. LUJAN. Mr. Chairman, with that being said, again, just to remind everyone here, I appreciate where the discussion went to 

really talk about veterans. To say that, we should not require agencies to reach out to veteran-owned businesses with the sacrifices 

that they make every day of their lives and what they did for this 

great Nation of ours? To see what we can truly do to make sure 

that they are going to be included? Simply, as the amendment 

says, to reach out and to provide technical assistance to provide a 

foundation for these companies, for these entrepreneurs, to be able 

to strengthen this great economy of ours. I think it is sad if we 

don’t go down that line. We should do all that we can do to reach 

out to some of these organizations. And again, I appreciate that we 

have been talking about veteran organizations, veteran groups, veteran-owned businesses, veteran entrepreneurs to see what we can 

do to reach out and work with them and get them included here, 

Mr. Chairman. And again, it is revenue neutral. When we talk 

about what needs to be done to get the economy growing again and 

looking at language like this that allows us to work together to 

look after men and women of all races, of all creed, to be able to 

provide them that path forward to seek out programs like SBIR 

and STTR that are great I think is something important for us to 

consider. With that, Mr. Chairman, I certainly encourage adoption 

of this amendment which now includes disabled veterans, and I 

yield back my time. 

Chairman HALL. The gentleman yields back his time. At this 

time we will have a vote on the amendment as amended. All those 

in favor say aye, no. The no’s have it. The no’s have it. The amendment is not agreed to. 

Ms. JOHNSON. Recorded vote, Mr. Chairman. 

Chairman HALL. Now, let me make this statement before we go 

any further. The gentlelady has accepted the persons with disability to include veterans with disabilities, but we still have the 

mandatory situation to deal with. I urge a no vote on this, and the 

clerk will call the roll. 

The CLERK. Chairman Hall? 

Chairman HALL. No. 

The CLERK. Chairman Hall votes no. 

Mr. Sensenbrenner? 

[No response.] 

The CLERK. Mr. Smith? 

[No response.] 

The CLERK. Mr. Rohrabacher? 

Mr. ROHRABACHER. No. 

The CLERK. Mr. Rohrabacher votes no. 

Mr. Bartlett? 

Mr. BARTLETT. No. 

The CLERK. Mr. Bartlett votes no. 

Mr. Lucas? 

[No response.] 

The CLERK. Mrs. Biggert? 

Mrs. BIGGERT. No. 

The CLERK. Mrs. Biggert votes no. 


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Mr. Akin? 

[No response.] 

The CLERK. Mr. Neugebauer? 

Mr. NEUGEBAUER. No. 

The CLERK. Mr. Neugebauer votes no. 

Mr. McCaul? 

Mr. MCCAUL. No. 

The CLERK. Mr. McCaul votes no. 

Mr. Broun? 

Dr. BROUN. No. 

The CLERK. Mr. Broun votes no. 

Mrs. Adams? 

Mrs. ADAMS. No. 

The CLERK. Mrs. Adams votes no. 

Mr. Quayle? 

Mr. QUAYLE. No. 

The CLERK. Mr. Quayle votes no. 

Mr. Fleischmann? 

Mr. FLEISCHMANN. No. 

The CLERK. Mr. Fleischmann votes no. 

Mr. Rigell? 

Mr. RIGELL. No. 

The CLERK. Mr. Rigell votes no. 

Mr. Palazzo? 

Mr. PALAZZO. No. 

The CLERK. Mr. Palazzo votes no. 

Mr. Brooks? 

Mr. BROOKS. No. 

The CLERK. Mr. Brooks votes no. 

Mr. Harris? 

Mr. HARRIS. No. 

The CLERK. Mr. Harris votes no. 

Mr. Hultgren? 

Mr. HULTGREN. No. 

The CLERK. Mr. Hultgren votes no. 

Mr. Cravaack? 

Mr. CRAVAACK. Yea. 

The CLERK. Mr. Cravaack votes aye. 

Mr. Bucshon? 

Mr. BUCSHON. No. 

The CLERK. Mr. Bucshon votes no. 

Mr. Benishek? 

Mr. BENISHEK. No. 

The CLERK. Mr. Benishek votes no. 

Ms. Johnson? 

Ms. JOHNSON. Aye. 

The CLERK. Ms. Johnson votes aye. 

Mr. Costello? 

Mr. COSTELLO. Aye. 

The CLERK. Mr. Costello votes aye. 

Ms. Woolsey? 

Ms. WOOLSEY. Aye. 

The CLERK. Ms. Woolsey votes aye. 

Ms. Lofgren? 


sroberts on DSK5SPTVN1PROD with HEARING
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[No response.] 

The CLERK. Mr. Wu? 

Mr. WU. Aye. 

The CLERK. Mr. Wu votes aye. 

Mr. Miller? 

[No response.] 

The CLERK. Mr. Lipinski? 

Mr. LIPINSKI. Aye. 

The CLERK. Mr. Lipinski votes aye. 

Ms. Giffords? 

[No response.] 

The CLERK. Ms. Edwards? 

Ms. EDWARDS. Aye. 

The CLERK. Ms. Edwards votes aye. 

Ms. Fudge? 

Ms. FUDGE. Aye. 

The CLERK. Ms. Fudge votes aye. 

Mr. Lujan? 

Mr. LUJAN. Aye. 

The CLERK. Mr. Lujan votes aye. 

Mr. Tonko? 

Mr. TONKO. Aye. 

The CLERK. Mr. Tonko votes aye. 

Mr. McNerney? 

Mr. MCNERNEY. Aye. 

The CLERK. Mr. McNerney votes aye. 

Mr. Sarbanes? 

Mr. SARBANES. Aye. 

The CLERK. Mr. Sarbanes votes aye. 

Ms. Sewell? 

Ms. SEWELL. Aye. 

The CLERK. Ms. Sewell votes aye. 

[No response.] 

The CLERK. Ms. Wilson? 

Ms. WILSON. Aye. 

The CLERK. Ms. Wilson votes aye. 

Mr. Clarke? 

Mr. CLARKE. Aye. 

The CLERK. Mr. Clarke votes aye. 

Chairman HALL. Are there other members who wish to vote? All 

right. The clerk will report the vote. 

The CLERK. Mr. Chairman, 15 members vote aye and 17 members vote no. 

Chairman HALL. The amendment is not agreed to. 


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Chairman HALL. Are there other amendments? 

Mr. LIPINSKI. Mr. Chairman? 

Chairman HALL. Who seeks recognition? 

Mr. LIPINSKI. Mr. Lipinski. 

Chairman HALL. Mr. Lipinski? All right. The next amendment is 

offered by the gentleman from Illinois, Mr. Lipinski. Are you ready 

to proceed with your amendment? 


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Mr. LIPINSKI. Yes, I have an amendment at the desk. 

Chairman HALL. The clerk will report the amendment. 

The CLERK. Amendment number 018, amendment to H.R. 1425 

offered by Mr. Lipinski of Illinois. 

Chairman HALL. I ask unanimous consent to dispense with the 

reading. Without objection, it is so ordered. The gentleman is recognized for five minutes to explain his amendment. 

Mr. LIPINSKI. Thank you, Chairman Hall, for your work in quickly advancing this critical bill. I have been a champion of SBIR and 

STTR programs since I have been in Congress, and I hope assuming this bill passes the House in short order that we can finally 

reach an agreement with the Senate. That is why I was proud to 

join you in cosponsoring this bill. 

While I believe that both SBIR and STTR programs have worked 

well, I believe they do not do enough to support academic or national lab researchers who are founding a small business in trying 

to bring a new product to market. This means not only building 

successful prototype, it also means market research, developing an 

intellectual property strategy, investigating commercial or business 

opportunities. 

Without guidance and help in the early phases of commercialization, many small businesses will never get off the ground. My 

amendment would address this problem by creating a new pilot 

program within STTR at the National Institutes of Health. This 

idea is based on the testimony of one of the witnesses in the hearing held before the Technology Innovation Subcommittee at the end 

of March. Mr. Crowell described University of Virginia’s successful 

proof-of-concept program which helps researchers identify the most 

promising markets and direct their small business accordingly. 

This program, which is funded by a grant from the Coulter Foundation, has generated a five-to-one overall return on investment. 

This is not the only example of a successful phase zero program. 

The European Research Council funds a similar initiative, and 

Deshpande Center at MIT also includes some of these activities. 

This amendment will require the NIH to allocate $10 million 

from within its STTR program for at least 10 grants that will go 

to universities or other research institutions including national 

labs. These institutions would, in turn, use the grants to run proofof-concept programs modeled after successful examples I have mentioned. Within a proof-of-concept program at a research institution, 

small grants would be awarded to individual researchers to support 

translational proof-of-concept work including market analysis and 

mentoring. Critically, the proof-of-concept programs would be required to use an industry project management board composed of 

local, technical and business experts. This board would monitor the 

progress of grant recipients, imposing market-driven milestones 

and reporting requirements. The board should also be quick to terminate any failing projects. 

My amendment would bring an idea that succeeded with other 

funding sources to the STTR program through a limited pilot program at the NIH. It is an idea that has improved commercialization outcomes whenever it has been tried. It is worth trying here. 

I urge my colleagues to support this amendment, and I yield 

back the balance of my time. 


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Chairman HALL. I thank the gentleman for yielding back his 

time and actually, I yield myself five minutes. 

The amendment would take 13 percent of the STTR funds of the 

National Institute of Health’s STTR program and redirect them to 

the university commercialization activities. That is what I understand the gentleman to be saying. And while I recognize that it is 

challenging for universities to achieve effective technology transfer, 

I am concerned that this amendment supports that effort at the 

cost of small businesses who are currently the lead partner on the 

STTR grant. Indeed this bill is primarily a small business innovation bill, and most important, I don’t think it is appropriate to divert money away from small businesses under this bill. Further, 

under this amendment the NIH director would make awards to a 

university or research institution and allow the institution to fund 

individual grants. Traditionally NIH has provided awards directly 

to principal investigators after their applications have undergone a 

rigorous peer review process. 

I am concerned that the awards under this amendment would 

not be held to the same rigorous standards. While I agree that we 

should be promoting effective technology transfers at our colleges, 

universities and research institutions, I don’t believe this is a proper vehicle to achieve that goal. For these reasons, I oppose the gentleman’s amendment. Is there further discussion on the amendment? I yield back my time. The gentlelady from Ohio. 

Ms. FUDGE. Thank you, Mr. Chairman. I would like to first 

thank my colleague, Mr. Lipinski, for offering this amendment. It 

is well-known and we have heard testimony time and time again 

that there does in fact exist a valley of death where technologies 

are stuck between research and commercialization with insufficient 

resources to pull them through. Mr. Lipinski’s amendment would 

help address this problem by creating a pilot program for the early 

proof-of-concept stage of research and development. Moreover, it 

would help build the infrastructure of expertise and will facilitate 

the cultural change necessary for the transfer of technology from 

the university setting to the marketplace. 

Let us take a look at NIH. Ohio is one of the states hit hardest 

by this economic recession, but it is also one of the fastest-growing 

regions in bioscience. Last fiscal year the Ohio State University, 

which is my alma mater, had $124 million in NIH research expenditures which supported 2,500 jobs. Case Western Reserve University in my district received $185 million in NIH and NIHRR funds. 

Additionally, from 2000 to 2009, 170 companies were created, 

small businesses, from SBIR/STTR awards, and the majority of 

them were in Northeast Ohio. Mr. Lipinski’s amendment will grow 

that number and enable technology commercialization across the 

Nation by making these R&D dollars more effective. I urge my colleagues to support this amendment, and I would like to yield the 

balance of my time to my colleague, Mr. Lujan. 

Mr. LUJAN. I thank my colleague, Mr. Chairman, and I want to 

thank Mr. Lipinski as well for bringing this important topic forward. As you know, I am a proponent of technology transfer, and 

one of the significant roadblocks for technology transfer from universities and national labs is the lack of funding for proof-of-concept work, including technology maturation, prototype developVerDate Mar 15 2010 18:05 Jun 02, 2011 Jkt 099006 PO 00000 Frm 00257 Fmt 6601 Sfmt 6601 E:\HR\OC\HR090P1.XXX HR090P1

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ment, technical validation and market research. All of this is needed in order to attract business partners or capital for new technology. One of the roadblocks that groups, organizations, especially 

small businesses and entrepreneurs talk about is that there is no 

support to take basic technology innovation to mature it, to commercialize it, to attract investors or to help get it out of this valley 

of death. This is something that we hear from, not only during our 

hearings during markup, but I hear when I go home and I talk to 

our entrepreneurs. When those small business groups come and 

visit with us here at our offices, here in hearing rooms, this is one 

area that I think there is full agreement with. 

So this pilot program looks to be an effective way at testing a 

method for lowering the roadblock to commercialization. As we put 

ourselves back on a track to an innovative economy, to being able 

to attract more manufacturing here in the U.S., to help these entrepreneurs be able to move this technology forward, we need programs like this. 

So again, I applaud the efforts of my colleague. I fully support 

and I certainly hope that we can support small businesses to be 

able to accelerate their ability to take these innovative ideas and 

take them to the marketplace. 

With that, I yield back to my colleague from Ohio. 

Chairman HALL. The gentleman yields back. Is there further—— 

Ms. FUDGE. I yield back. 

Chairman HALL. —request? The gentlelady yields back her time. 

Mr. LIPINSKI. Mr. Chairman? 

Chairman HALL. Who seeks recognition? 

Mr. LIPINSKI. Mr. Lipinski. 

Chairman HALL. The author. I will recognize you, Mr. Lipinski. 

Go ahead, I recognize you for five minutes. 

Mr. LIPINSKI. Thank you, Chairman Hall. I will make this quick. 

I want to thank you again for all your work on this bill and also 

thank Chairman Quayle for his work. 

We all clearly want to support small business, but we do know 

that we have not only great research institutions, universities but 

the great research that is going on at our national labs that is out 

there. It is unfortunate that we don’t see enough of what is found 

in the lab brought to the market. I think this is critical for the future of our country, building more small businesses, creating more 

jobs. And this would not be taking money away from small businesses. It would be helping to create more small businesses. And 

I think doing a pilot program, setting aside a little bit of money to 

do that, we would only go to universities, national labs that have 

proven that they have programs in place that have helped researchers to start-up companies. So we will have that. There is no 

reason to believe that they will be using this money unwisely. They 

will have to have a proven track record of what they have done, 

and then we can see, we can evaluate after the pilot program is 

done if it is has been successful. 

So again, I want to thank you, Chairman Hall, for your work on 

this legislation, and I just want to urge my colleagues to support 

this to help us create those small businesses that we all know are 

critical for our country. And I yield back. 


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Chairman HALL. And the gentleman yields back, and I thank the 

gentleman for his input. And I know the gentleman’s intention is 

sincere. I disagree with him that this is a small business bill, and 

it does take money from small businesses. I suggested universities, 

colleges are great to support, and I recognize the gentleman’s 

knowledge about their needs and he represents his district well. 

But I disagree with him on whether this is a small business bill, 

and I don’t think we ought to divert any of the funds otherwise. 

Is there anyone else who wants to be heard? All right. If not, we 

will vote on the amendment. Those in favor of the amendment say 

aye, those who oppose say no. Chair believes the no’s have it. 

Mr. LIPINSKI. Mr. Chairman? 

Chairman HALL. The Chair recognizes a motion from—— 

Mr. LIPINSKI. Ask for a recorded vote. 

Chairman HALL. Yes. A record vote is called for. The clerk will 

call the roll. 

The CLERK. Chairman Hall? 

Chairman HALL. Votes no. 

The CLERK. Chairman Hall votes no. 

Mr. Sensenbrenner? 

[No response.] 

The CLERK. Mr. Smith? 

[No response.] 

The CLERK. Mr. Rohrabacher? 

Mr. ROHRABACHER. No. 

The CLERK. Mr. Rohrabacher votes no. 

Mr. Bartlett? 

[No response.] 

The CLERK. Mr. Lucas? 

[No response.] 

The CLERK. Mrs. Biggert? 

Mrs. BIGGERT. No. 

The CLERK. Mrs. Biggert votes no. 

Mr. Akin? 

[No response.] 

The CLERK. Mr. Neugebauer? 

Mr. NEUGEBAUER. No. 

The CLERK. Mr. Neugebauer votes no. 

Mr. McCaul? 

Mr. MCCAUL. No. 

The CLERK. Mr. McCaul votes no. 

Mr. Broun? 

Dr. BROUN. No. 

The CLERK. Mr. Broun votes no. 

Mrs. Adams? 

Mrs. ADAMS. Aye. 

The CLERK. Mrs. Adams votes aye. 

Mr. Quayle? 

Mr. QUAYLE. No. 

The CLERK. Mr. Quayle votes no. 

Mr. Fleischmann? 

Mr. FLEISCHMANN. No. 

The CLERK. Mr. Fleischmann votes no. 

Mr. Rigell? 


sroberts on DSK5SPTVN1PROD with HEARING
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Mr. RIGELL. No. 

The CLERK. Mr. Rigell votes no. 

Mr. Palazzo? 

Mr. PALAZZO. No. 

The CLERK. Mr. Palazzo votes no. 

Mr. Brooks? 

Mr. BROOKS. No. 

The CLERK. Mr. Brooks votes no. 

Mr. Harris? 

Mr. HARRIS. No. 

The CLERK. Mr. Harris votes no. 

Mr. Hultgren? 

Mr. HULTGREN. No. 

The CLERK. Mr. Hultgren votes no. 

Mr. Cravaack? 

Mr. CRAVAACK. No. 

The CLERK. Mr. Cravaack votes no. 

Mr. Bucshon? 

[No response.] 

The CLERK. Mr. Benishek? 

Mr. BENISHEK. Aye. 

The CLERK. Mr. Benishek votes aye. 

Ms. Johnson? 

Ms. JOHNSON. Aye. 

The CLERK. Ms. Johnson votes aye. 

Mr. Costello? 

[No response.] 

The CLERK. Ms. Woolsey? 

Ms. WOOLSEY. Aye. 

The CLERK. Ms. Woolsey votes aye. 

Ms. Lofgren? 

[No response.] 

The CLERK. Mr. Wu? 

Mr. WU. Aye. 

The CLERK. Mr. Wu votes aye. 

Mr. Miller? 

Mr. MILLER. Aye. 

The CLERK. Mr. Miller votes aye. 

Mr. Lipinski? 

Mr. LIPINSKI. Aye. 

The CLERK. Mr. Lipinski votes aye. 

Ms. Giffords? 

[No response.] 

The CLERK. Ms. Edwards? 

Ms. EDWARDS. Aye. 

The CLERK. Ms. Edwards votes aye. 

Ms. Fudge? 

Ms. FUDGE. Aye. 

The CLERK. Ms. Fudge votes aye. 

Mr. Lujan? 

Mr. LUJAN. Aye. 

The CLERK. Mr. Lujan votes aye. 

Mr. Tonko? 

Mr. TONKO. Aye. 


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The CLERK. Mr. Tonko votes aye. 

Mr. McNerney? 

Mr. MCNERNEY. Aye. 

The CLERK. Mr. McNerney votes aye. 

Mr. Sarbanes? 

Mr. SARBANES. Aye. 

The CLERK. Mr. Sarbanes votes aye. 

Ms. Sewell? 

[No response.] 

The CLERK. Ms. Wilson? 

Ms. WILSON. Aye. 

The CLERK. Ms. Wilson votes aye. 

Mr. Clarke? 

Mr. CLARKE. Yes. 

The CLERK. Mr. Clarke votes aye. 

Chairman HALL. Are there other members who wish to vote? 

Mr. COSTELLO. Mr. Chairman? Costello votes aye. 

The CLERK. Mr. Costello votes aye. 

Chairman HALL. Are there others? The clerk will report roll call. 

The CLERK. Mr. Chairman, 16 members vote aye and 14 members vote no. 

Chairman HALL. The amendment is agreed to. 


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Chairman HALL. Are there other amendments? 

Mr. TONKO. Mr. Chairman, I have an amendment at the desk. 

Chairman HALL. All right. The next amendment is offered by the 

gentleman from New York, and we just have three more to go, I 

think. Mr. Tonko, are you ready to proceed with your amendment? 

Mr. TONKO. Yes, I am, sir. 

Chairman HALL. The clerk will report the amendment. 

The CLERK. Amendment number 035, amendment to H.R. 1425 

offered by Mr. Tonko of New York. 


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Chairman HALL. The gentleman is recognized for five minutes to 

report the amendment. 

Mr. TONKO. Thank you, Mr. Chair. After meeting with many constituents and reviewing the National Academies’ report on the 

SBIR program, it is clear to me we should be doing more at NIH 

to help all types of companies to commercialize their products that 

they have developed in the SBIR program at NIH. 

Most of the discussion about opening the entire SBIR program 

seems to be coming from companies that participate or would like 

to particulate in the SBIR program at NIH. To address the concerns of these companies, I have offered this amendment. It would 

create a pilot program within NIH. This program would provide 

funding to any SBIR Phase II recipient companies from 2007 

through 2008 equal to their face to award through a competitive 

process for the purposes of commercialization. Funds would be 

awarded to eligible companies for the purpose of commercialization. 

A key process in the product development phase, this commercialization funding would enable the companies to quickly hire additional help and move their product to market. The valley of death 

is real, and the pilot program I have proposed here aims at eliminating that valley of death for SBIR companies awarded through 

NIH. Their success and developments to date are often credited to 

the SBIR program. However, this amendment would make the 

most important leap, taking the idea from a lab or research center 

and launching the product to market, creating real jobs and real 

economic growth. This concept originated with small businesses in 

my district which came to me with the desire to grow and create 

more jobs. They recognize and feel the pressure of the valley of 

death each and every day. This pilot program can be used to attempt a new, innovative approach. We use the years 2007 and 2008 

as a baseline because it is the products developed in these years 

that are ready to be commercialized today. I urge members of the 

Committee to support this amendment, Mr. Chair, and I yield back 

the balance of my time. 

Chairman HALL. The gentleman yields back the balance of his 

time, and I thank the gentleman. At a time when our Nation is facing very significant deficits, I think it is inappropriate to authorize 

such a large program that we have not fully examined. One of the 

strengths of H.R. 1425 is that it does not authorize any additional 

funding. Instead, the SBIR and STTR programs are funded 

through set-asides from existing agency research budgets. This 

amendment would add $538 million in new spending which we just 

can’t afford at this time. I oppose this amendment and urge my colleagues to do so. 

Is there further discussion on the amendment? The Chair hears 

none. Hearing no further discussion, the vote occurs on the amendment. All in favor say aye—— 

Mr. TONKO. Mr. Chair, I request a recorded vote, please. 

Chairman HALL. A recorded vote is requested. Let me finish with 

the first vote first. 

Mr. TONKO. Okay. 

Chairman HALL. All those in favor say aye. All those opposed say 

no. The no’s have it. 

Mr. TONKO. Mr. Chair, I move for a recorded vote, please. 


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Chairman HALL. Recorded vote is called. The clerk will please 

call the roll. 

The CLERK. Yes. 

Chairman HALL. In a hurry. 

The CLERK. Chairman Hall? 

Chairman HALL. No. 

The CLERK. Chairman Hall votes no. 

Mr. Sensenbrenner? 

[No response.] 

The CLERK. Mr. Smith? 

[No response.] 

The CLERK. Mr. Rohrabacher? 

Mr. ROHRABACHER. No. 

The CLERK. Mr. Rohrabacher votes no. 

Mr. Bartlett? 

[No response.] 

The CLERK. Mr. Lucas? 

[No response.] 

The CLERK. Mrs. Biggert? 

Mrs. BIGGERT. No. 

The CLERK. Mrs. Biggert votes no. 

Mr. Akin? 

[No response.] 

The CLERK. Mr. Neugebauer? 

Mr. NEUGEBAUER. No. 

The CLERK. Mr. Neugebauer votes no. 

Mr. McCaul? 

Mr. MCCAUL. No. 

The CLERK. Mr. McCaul votes no. 

Mr. Broun? 

Dr. BROUN. No. 

The CLERK. Mr. Broun votes no. 

Mrs. Adams? 

Mrs. ADAMS. No. 

The CLERK. Mrs. Adams votes no. 

Mr. Quayle? 

Mr. QUAYLE. No. 

The CLERK. Mr. Quayle votes no. 

Mr. Fleischmann? 

Mr. FLEISCHMANN. No. 

The CLERK. Mr. Fleischmann votes no. 

Mr. Rigell? 

Mr. RIGELL. No. 

The CLERK. Mr. Rigell votes no. 

Mr. Palazzo? 

Mr. PALAZZO. No. 

The CLERK. Mr. Palazzo votes no. 

Mr. Brooks? 

[No response.] 

The CLERK. Mr. Harris? 

Mr. HARRIS. No. 

The CLERK. Mr. Harris votes no. 

Mr. Hultgren? 

Mr. HULTGREN. No. 


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The CLERK. Mr. Hultgren votes no. 

Mr. Cravaack? 

Mr. CRAVAACK. No. 

The CLERK. Mr. Cravaack votes no. 

Mr. Bucshon? 

[No response.] 

The CLERK. Mr. Benishek? 

Mr. BENISHEK. No. 

The CLERK. Mr. Benishek votes no. 

Ms. Johnson? 

Ms. JOHNSON. Aye. 

The CLERK. Ms. Johnson votes aye. 

Mr. Costello? 

Mr. COSTELLO. Aye. 

The CLERK. Mr. Costello votes aye. 

Ms. Woolsey? 

Ms. WOOLSEY. Aye. 

The CLERK. Ms. Woolsey votes aye. 

Ms. Lofgren? 

[No response.] 

The CLERK. Mr. Wu? 

Mr. WU. Aye. 

The CLERK. Mr. Wu votes aye. 

Mr. Miller? 

Mr. MILLER. Aye. 

The CLERK. Mr. Miller votes aye. Mr. Lipinski? 

Mr. LIPINSKI. Aye. 

The CLERK. Mr. Lipinski votes aye. 

Ms. Giffords? 

[No response.] 

The CLERK. Ms. Edwards? 

Ms. EDWARDS. Aye. 

The CLERK. Ms. Edwards votes aye. 

Ms. Fudge? 

Ms. FUDGE. Aye. 

The CLERK. Ms. Fudge votes aye. 

Mr. Lujan? 

Mr. LUJAN. Aye. 

The CLERK. Mr. Lujan votes aye. 

Mr. Tonko? 

Mr. TONKO. Aye. 

The CLERK. Mr. Tonko votes aye. 

Mr. McNerney? 

Mr. MCNERNEY. Aye. 

The CLERK. Mr. McNerney votes aye. 

Mr. Sarbanes? 

Mr. SARBANES. Aye. 

The CLERK. Mr. Sarbanes votes aye. 

Ms. Sewell? 

[No response.] 

The CLERK. Ms. Wilson? 

Ms. WILSON. Aye. 

The CLERK. Ms. Wilson votes aye. 

Mr. Clarke? 


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[No response.] 

Chairman HALL. Are there other who wish to vote? The clerk report the vote, please. 

The CLERK. Mr. Chairman, 13 members vote aye and 15 members vote no. 

Chairman HALL. The amendment is not agreed to. 

Chairman HALL. Are there further amendments? 

Dr. BROUN. Mr. Chairman? 


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Chairman HALL. Dr. Broun, I recognize you for your amendment. 

Dr. BROUN. Mr. Chairman, I have an amendment at the desk. 

Chairman HALL. The next amendment is amendment number 22, 

an amendment offered by the gentleman from Georgia. Are you 

ready to proceed with your amendment, sir? 

Dr. BROUN. Yes, Mr. Chairman. The amendment is—— 

Chairman HALL. The clerk will report the amendment. 

The CLERK. Amendment number 022, amendment to H.R. 1425 

offered by Mr. Broun of Georgia. 

Chairman HALL. I would ask unanimous consent to dispense 

with the reading. Without objection, it is so ordered. The gentleman from Georgia is recognized for five minutes to explain his 

amendment. 

Dr. BROUN. Thank you, Mr. Chairman. My amendment will respond to recent reviews by the Inspectors General community 

which found that the SBIR and STTR programs were vulnerable to 

certain kinds of waste, fraud and abuse. While H.R. 1425 already 

takes a number of positive steps to address these vulnerabilities, 

my amendment would add provisions to make it easier for SBIR 

agencies and other auditors to detect waste, fraud and abuse. 

The amendment would standardize several requirements which 

some agencies already require of the SBIR and STTR grant recipients, thus notably, the amendment requires applicants and awardees to certify the statements they make in their applications and 

reports. These certifications make it easier for law enforcement to 

hold accountable applicants who make false statements to win an 

SBIR awards or receive SBIR payments. 

My amendment makes a series of mostly technical changes to 

H.R. 1425’s waste, fraud and abuse provisions. The purpose of 

these changes is to strengthen the bill’s already robust waste, fraud 

and abuse provisions. Many of these suggestions have come from 

the Council of Inspectors General for integrity and efficiency working group that has been examining fraud in the SBIR and STTR 

programs. 

I would like to recognize Senators Grassley and Rockefeller for 

initiating a parallel amendment to the Senate legislation, and I 

hope that both Houses of Congress will include similar language 

prior to conferencing this legislation. 

I urge my colleagues to support improving mechanisms to detect 

and reduce waste, fraud and abuse in these programs and to support my amendment. Mr. Chairman, I yield back. 

Chairman HALL. The gentleman yields back, and I thank the 

gentleman for his amendment. I think it is a good addition to the 

bill. One of the most important duties we have as a Committee is 

to ensure proper oversight of the programs over which we have jurisdiction. This is the best way to ensure that vital taxpayer dollars 

are not wasted. I think this amendment will assist in ensuring that 

the SBIR and STTR programs are being properly administered at 

the federal agencies, and I support it. Are there others who wish 

to be heard? 

Ms. EDWARDS. Mr. Chairman? 

Chairman HALL. The Chair recognizes the gentlelady from Maryland. 


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Ms. EDWARDS. Mr. Chairman, I have a second-degree amendment at the desk. It has been shared with the majority. 

Chairman HALL. All right. The clerk will distribute the amendment. Wait until we all get it. The clerk shall report the amendment. 

The CLERK. Amendment number 010, amendment offered by Ms. 

Edwards of Maryland to the amendment offered by Mr. Broun of 

Georgia. 

Chairman HALL. I ask unanimous consent to dispense with the 

reading. Without objection, so ordered. The gentlelady is recognized 

for five minutes to explain her amendment. 

Ms. EDWARDS. Thank you, Mr. Chairman, and I want to thank 

and congratulate Dr. Broun, Mr. Broun, on his amendment. He has 

really taken up I think a really important area of accountable and 

transparency, and I join him in supporting these set of provisions. 

In fact, had he not offered them, I was looking also at what the 

Senate leaders have done and wanted to make sure that we did the 

same thing in the house. And so Mr. Broun, thank you. 

I am offering an amendment, and my intent is really to ensure 

that we entrust the enforcing and anti-fraud provisions of the program. The Inspectors General and Justice Department, we want to 

make sure that they have adequate tools to punish those who commit fraud against the government and taxpayer. We really should 

give credit to Senator Rockefeller who has done most of the lion’s 

share work on fraud and misuse of SBIR grants, and the language 

that is offered today is almost identical to an amendment drafted 

by the Senators, but that shouldn’t detract at all from our consideration of that here in the House and in this Committee. 

Credit also has to go to the Inspectors General at the National 

Science Foundation and NASA, particularly Allison Lerner, the 

NSF IG has been a leading voice on the need to insert a lot more 

managerial rigor into the SBIR program, and I am happy to follow 

their advice on how to proceed. 

According to the National Science Foundation Inspector General, 

one issue that has been particularly vexing is a lack of ongoing certification by the SBIR recipients, that they are doing the work they 

applied to do and that they are not basically double-dipping, duplicating funding from other agencies. The NSF already requires such 

certifications in their applications for Phase I and Phase II awards, 

as well as at the time of interim and final reports. And the question is, do we require those same sort of certifications so that we 

strengthen the hands of enforcement authorities to make sure that 

they are able to actually prosecute waste, fraud and abuse when 

it occurs? And what we have heard from both the Inspectors General and from the Department of Justice is that they lack that tool 

and lacking the certification where the recipient would have to 

check off a certain amount of boxes, not anything that is particular 

onerous indicating that they are not double-dipping, that they are 

not submitting for duplicate funds, in that certification process. 

Then when the prosecutor finds that there might be waste, fraud 

or abuse or the Inspector General does, there is some teeth in 

terms of enforcing the requirements of the grant. 

And so NSF, the IG, they have a report on this, and they found 

that without that certification and agency’s requiring, the Justice 


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Department is actually reluctant to pursue fraud cases. And that 

is the purpose of this amendment, is to require the certification, require the recipient to check off the boxes in the normal SBIR process so it is no anymore onerous. It is a one-sheet form of certifications, and then that gives the enforcement authorities the tools 

that they need in case there is fraud going on. 

So I offer the amendment in the spirit of actually perfecting Dr. 

Broun’s well-intentioned provision, and my language that has been 

worked out with the Inspector General makes it clear that the new 

rules on certification will require certification at every stage of a 

project and that the certifications will include attestations that the 

people and firms paid to do the work are actually doing the work 

for which they submitted, and they provide a firm disclosure if they 

have pursued or are pursing funding from other agencies for the 

same or similar work. 

And so I want to thank you very much, and I know that many 

members might be concerned. Some members might be concerned 

that it adds to the burden, but it can already be a part of the SBIR 

process, and NSF has found that, you know, you have the form in 

there, the certification is done and then the grant is pursued. 

And so I would appreciate consideration of this amendment to an 

already really strong set of provisions, and I hope that, Dr. Broun, 

you would accept it and that members of the Committee would, 

and with that I yield. 

Chairman HALL. The gentlelady yields, and I thank her for her 

statement. I appreciate the gentlelady’s desire to add to the content 

of Dr. Broun’s amendment with a second-degree amendment. However, as we have only just received this amendment during the 

markup, I am inclined to oppose this amendment as members are 

not being provided enough time to review the contents and implications of the gentlelady’s amendment to Dr. Broun’s amendment. 

We attempt to avoid last-minute situations like these by the use 

of a roster, knowing that members do have the ability to craft second-degree amendments at any point during the markup. Committee policy and the spirit of comity dictates that the members be 

provided sufficient time to review, inquire about and research language to be adopted by the underlying bill. As the gentlelady’s 

amendment is time-stamped 5:34 p.m. last evening, it would have 

gone a long way to the cooperative process had the Republican 

Committee staff and Dr. Broun’s staff been apprised of the 

gentlelady’s desire to add to Dr. Broun’s amendment. Because I am 

concerned about including language not fully vetted by the members, I would ask that the gentlelady withdraw her amendment 

and possibly work with Dr. Broun prior to this bill going to the 

Floor. I yield back my time. 

Ms. EDWARDS. Mr. Chairman? 

Chairman HALL. I beg your pardon? Ms. Edwards? 

Ms. EDWARDS. Mr. Chairman, let me just say I really appreciate 

that, and I would be willing to withdraw it and work with Dr. 

Broun, you know, just because of logistics between Dr. Broun and 

myself. I only had a chance to actually speak with him this morning and then fully intended to do that yesterday, but we were unable to have that conversation. And so I appreciate that, and I 

think that this is consistent with Dr. Broun’s approach and would 


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look forward to working with him, withdrawing the amendment 

and making sure that it could be included. 

Chairman HALL. I don’t question your genuine sincerity. Dr. 

Broun, I recognize you for an acceptance of this gentlelady’s suggestion which I suggest you accept. 

Dr. BROUN. Mr. Chairman, I accept your suggestion to accept the 

lady’s suggestion that she and I work together. And in fact, she 

and I work together on about a lot of issues. She is my ranking 

member on my O&I Subcommittee. I have a tremendous respect for 

her and enjoy working with her. And I do look forward to working 

the details out with this. 

The secondary amendment actually just lists the certification 

process whereas the amendment itself would put in place the certification. But this just enumerates what those certifications are, 

and I am very eager to work with the lady from Maryland to work 

this out so it is to everyone on the Committee’s satisfaction. So I 

agree. 

Chairman HALL. I thank the gentleman. The gentlelady has 

withdrawn her second-degree amendment, 0.10. Is there further 

discussion on the amendment offered by the gentleman from Georgia? Hearing none, the vote occurs on the amendment. All in favor 

say aye, those opposed say no. The yeas have it. The amendment 

is agreed to. 

Are there any other amendments? 

Mr. LUJAN. Mr. Chairman? 

Chairman HALL. For what purpose does the gentleman seek recognition? 

Mr. LUJAN. Mr. Chairman, I have an amendment at the desk. 

Chairman HALL. The next amendment is offered by the gentleman from New Mexico, Mr. Lujan. Are you ready to proceed with 

your amendment? 

Mr. LUJAN. Yes, Mr. Chairman. 

Chairman HALL. The clerk will report the amendment. 

The CLERK. Amendment number 018, amendment to H.R. 1425 

offered by Mr. Lujan of New Mexico. 

Chairman HALL. I ask unanimous consent to dispense with the 

reading. Without objection, it is so ordered. I recognize the gentleman from New Mexico for five minutes. 

Mr. LUJAN. Thank you, Mr. Chairman. This amendment would 

add the STTR program to the National Research Council’s ongoing 

study. Following the agreement between myself and Chairman 

Quayle at the Subcommittee markup, our offices worked together 

and we came up with language that would be acceptable to both 

the majority and the minority. 

A study of the STTR program is long overdue. The most recent 

examination of the STTR program was a 2001 GAO report which 

was used for the 2001 reauthorization of the program. However, 

the report was based off of 102 Phase II projects from 1995 to 1997, 

only the first three years of this project. So the past 14 years of 

STTR awards experience was left unexamined. I think it is important that we look at it. 

It is imperative that a study of this program be performed as 

part of our Congressional oversight, and I thank Chairman Quayle 

and the Committee staff for their cooperation in drafting acceptable 


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language, and I urge adoption of this amendment. Mr. Chairman, 

I yield back. 

Chairman HALL. I thank the gentleman, and I certainly thank 

the gentleman from New Mexico for his interest in evaluating the 

STTR program and appreciate that we were able to work between 

Subcommittee and Full Committee, and I think that is the understanding of the Chairman of the Subcommittee on an amendment 

establishing strong evaluation mechanisms for the program. I am 

pleased to support the gentleman’s amendment. 

Is there further discussion? The Chair hears none, so at this time 

all in favor of the amendment say aye, those opposed say no. The 

ayes have it, and the amendment is agreed to. 

Are there further amendments? 

Mr. ROHRABACHER. Mr. Chairman, I have an amendment at the 

desk. 

Chairman HALL. The gentleman from California has an amendment. Are you ready to proceed, Mr. Rohrabacher? 

Mr. ROHRABACHER. I am. 

Chairman HALL. The clerk will report the amendment. 

The CLERK. Amendment number 014, amendment to H.R. 1425 

offered by Mr. Rohrabacher of California. 

Chairman HALL. I ask unanimous consent to dispense with the 

reading. Without objection, it is so ordered. 

Mr. ROHRABACHER. Mr. Chairman, may I describe what my 

amendment is? 

Chairman HALL. I recognize you for five minutes. If you can’t describe it in five minutes, I will consider five minutes. 

Mr. ROHRABACHER. All right. Well, we have had the debate a little bit earlier on this idea of lists. My amendment would modify 

language offered in subcommittee by Representative Lujan which 

states that federal agencies shall encourage SBIR and STTR applications from a number of different types of small businesses. The 

current list includes small businesses located in rural areas with 

high unemployment, small businesses owned by women, veterans 

or minorities and my amendment would add small businesses 

owned and operated by individuals with disabilities. As I mentioned earlier with the earlier debate, I would prefer not having 

lists. It seems to me that we should be encouraging people who are 

struggling to improve their lives regardless of their race, regardless 

of their sex. That makes every sense to me and certainly trying to 

give someone a preference in reaching out to people who are of a 

race or sex that is being targeted for helping or whatever to try to 

give a helping hand, if those particular women or those particular 

minority people happen to be from wealthy families, we aren’t 

doing anybody any justice. 

So I would prefer no lists at all. But if we have to have lists, putting people with disabilities on that list is the one that really 

makes sense because someone with a disability, whether they are 

a woman or a minority, those people have a personal struggle that 

they have to go through in order to succeed in the business world 

and in small business, et cetera, and in this innovative world that 

we are trying to promote. 

So while my amendment seeks to promote a broader pool of applicants for the agencies involved, I think that if we are going to 


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do that, let us put people with disabilities on that list. With that, 

I yield back the balance of my time. 

Chairman HALL. The gentleman yields back his time. I thank the 

gentleman for his amendment. I think it is a good addition to the 

bill. I share the gentleman’s concern about leaving people out and 

creating lists. It might tend to ignore an important group that 

needs assistance. I think the gentleman has highlighted one such 

group with his amendment. And it is my hope that the agencies 

would try to encourage applications from as many diverse individuals as possible. We never know where the next great ideas in innovation will come from. That is what makes us a great country. 

I support the gentleman’s amendment, and I urge my colleagues to 

do the same. 

Ms. JOHNSON. Question. 

Chairman HALL. Does anyone else seek recognition? 

Ms. JOHNSON. Yes. 

Chairman HALL. The gentlelady from Dallas, I recognize you for 

five minutes. 

Ms. JOHNSON. Thank you very much. This amendment is intended to stand alone and not include any other language? Initially? 

Mr. ROHRABACHER. Yes. 

Ms. JOHNSON. Okay. Of course, there is no other language in the 

bill. I was wondering. Your initial statement was added to the 

other. 

Chairman HALL. The gentlelady yield back? 

Ms. JOHNSON. Yes, I yield back. 

Chairman HALL. The gentlelady yields back. Are there others 

seeking? All right. Hearing no other, the vote occurs on the amendment. All in favor say aye, those who oppose say no. The ayes have 

it. The ayes have it, and the amendment is agreed to. 

Are there other amendments? Hearing none, the question is on 

the bill H.R. 1425, the Creating Jobs Through Small Business Innovation Act of 2011 as amended. All those in favor will say aye. 

All those opposed say no. In the opinion of the Chair, the ayes have 

it. The ayes have it. I will now recognize myself for a motion on 

the bill. I move that the Committee favorably report H.R. 1425 as 

amended to the House with the recommendation that the bill do 

pass. Furthermore, I move that staff be instructed to prepare the 

legislative report and make necessary technical and conforming 

changes and that the Chairman take all necessary steps to bring 

the bill before the House for consideration. 

The question is on the motion to report the bill. Those in favor 

say aye, those opposed say no. The ayes have it, and the resolution 

is supported. Without objection, the motion to reconsider is laid 

upon the table. Members may have two subsequent calendar days 

in which to submit supplemental minority or additional views on 

the measure with receipt of such by 10:00 a.m. Monday, May the 

9th. I move pursuant to Clause 1 of Rule 22 of the Rules of the 

House of Representatives that the Committee authorizes the Chairman to offer such motions as may be necessary in the House to 

adopt and pass H.R. 1425, the Creating Jobs Through Small Business Innovation Act of 2011 as amended. Without objection, it is so 

ordered. 


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This concludes our Full Committee markup. The Chairman declares this Full Committee adjourned. 

[Whereupon, at 12:37 p.m., the Committee was adjourned.] 


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Appendix: 

H.R. 1425, SECTION-BY-SECTION ANALYSIS, AMENDMENT ROSTER


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SECTION-BY-SECTION ANALYSIS OF

H.R. 1425, CREATING JOBS THROUGH SMALL BUSINESS INNOVATION ACT 

OF 2011 

Section By Section Description 

I. PURPOSE

The purpose of H.R. 1425, sponsored by Rep. Renee Ellmers (R–NC 2), and cosponsored by Rep. Jason Altmire (D–PA 4), Rep. Judy Biggert (R–IL 13), Rep. Howard Coble, (R–NC 6), Rep. Sam Graves (R–MO 6), Rep. Ralph Hall (R–TX 4), Rep. 

Eddie Bernice Johnson (D–TX 30), Rep. Daniel Lipinski (D–IL 3), Rep. Benjamin 

Quayle (R–AZ 3), Rep. Cedric L. Richmond (D–LA 2), and Rep. David Wu (D–OR 

1), is to reauthorize the Small Business Innovation Research (SBIR) and Small 

Business Technology Transfer (STTR) programs. 

II. BACKGROUND AND NEED FOR LEGISLATION

The Small Business Innovation Research (SBIR) program was originally established when the Congress passed the Small Business Innovation Development Act 

in 1982 (P.L. 97–219). 

The original objectives of the SBIR program included: 

•Stimulation of technological innovation in the small business sector; 

•Increased use of the small business sector to meet the government’s research and 

development (R&D) needs; 

•Additional involvement of minority and disadvantaged individuals in the process; 

and 

•Expanded commercialization of the results of federally funded R&D. 

The 1992 SBIR reauthorization (P.L. 102–564) placed greater emphasis on the objective of commercialization of SBIR projects. 

Current law requires that every federal department with an extramural R&D 

budget of $100 million or more establish and operate an SBIR program. Eleven federal departments have SBIR programs, including the Departments of Agriculture, 

Commerce, Defense, Education, Energy, Health and Human Services, Homeland Security, and Transportation; the Environmental Protection Agency, the National Aeronautics and Space Administration (NASA); and the National Science Foundation 

(NSF). Under the program, each qualifying federal department is mandated to set 

aside 2.5 percent of its applicable extramural R&D for the SBIR program. Cumulatively, the SBIR program makes almost $2 billion in awards to small businesses annually. 

The Small Business Technology Transfer (STTR) program was created in 1992 to 

provide federal R&D funding for research proposals that are developed and executed 

cooperatively between a small firm and a scientist in a nonprofit research organization, and fall under the mission requirements of the federal funding agency. 

Federal departments with annual extramural research budgets over $1 billion 

must set aside 0.3 percent for STTR programs. Currently, the Departments of Energy, Defense, and Health and Human Services, as well as NASA and NSF participate in the STTR program. Across the participating agencies, approximately $800 

million in STTR awards are made annually. 

The SBIR and STTR programs have been operating under temporary extensions 

since their authorizations expired in 2008 and 2009, respectively. 

H.R. 1425 will reauthorize the SBIR and the STTR programs through Fiscal Year 

2014. 

This bill will increase the size guidelines for award amounts for Phase I and 

Phase II SBIR and STTR awards, will enable majority venture capital backed firms 

to participate in the program, and will improve evaluation of the programs through 

greater data collection, sharing of best practices, and increased efforts to prevent 

fraud, waste, and abuse. 

H.R. 1425 has been referred on April 7, 2011 to the Committee on Science, Space, 

and Technology, and in addition to the Committee on Small Business, and the Committee on House Armed Services. 


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III. SUBCOMMITTEE ACTIONS

The Technology and Innovation Subcommittee held a hearing on March 31, 2011 

entitled ‘‘The Role of Small Business in Innovation and Job Creation: The SBIR and 

STTR Programs.’’ The purpose of the hearing was to examine the role of the Small 

Business Innovation Research (SBIR) and the Small Business Technology Transfer 

(STTR) Programs in promoting innovation. 

The Committee received testimony from: Dr. Sally Rockey, Deputy Director for 

Extramural Research at the National Institutes of Health; Dr. Donald Siegel, Dean 

and Professor at the School of Business, University at Albany, State University of 

New York, and a Member of the research team for the Committee for Capitalizing 

on Science, Technology, and Innovation, National Research Council of the National 

Academies; Mr. Mark Crowell, Executive Director and Associate Vice President for 

Innovation Partnerships and Commercialization at the University of Virginia; Mr. 

Doug Limbaugh, Chief Executive Officer of Kutta Technologies; and Ms. Laura 

McKinney, President and Chief Executive Officer of Galois, Inc. 

Witnesses discussed their experience with the SBIR and STTR Programs and provided advice on areas of potential improvement as the Committee is currently considering reauthorization of these programs. 

The Subcommittee on Technology and Innovation met to consider H.R. 1425 on 

April 13, 2011. 

The Subcommittee considered seven amendments, and approved four. 

An amendment offered by Mr. Wu to extend the authorization through Fiscal 

Year 2016 was not agreed to by voice vote. 

An amendment offered by Mr. Lipinski to direct civilian agencies making awards 

in the SBIR and STTR commercialization pilot program to consider whether the 

technology to be supported by the awards is likely to be manufactured in the United 

States was agreed to by voice vote. 

An amendment offered by Mr. Quayle to ensure that applications for SBIR or 

STTR awards at the National Institutes of Health (NIH) and the National Science 

Foundation (NSF) undergo standard agency peer review process was accepted by 

voice vote. 

An amendment offered by Ms. Wilson to authorize $10 million annually for the 

Small Business Administration to award grants to organizations that provide outreach and application assistance to underrepresented business groups was defeated 

by a recorded vote of four yeas and nine nays. 

An amendment offered by Mr. Lipinski that requires the evaluation by the National Academies to estimate the number of jobs created ‘‘in the United States,’’ as 

opposed to just the number of jobs created was agreed to by voice vote. 

An amendment by Mr. Lujan to conduct a comprehensive study and report by the 

National Academies of the STTR program was withdrawn. 

An amendment by Mr. Lujan requiring federal agencies to encourage applications 

under the SBIR and STTR programs from underrepresented business groups was 

agreed to by voice vote. 

The bill, as amended, was agreed to by voice vote, and was favorably reported to 

the full Committee by voice vote. 


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IV. SECTION-BY-SECTION ANALYSIS

H.R. 1425, CREATING JOBS THROUGH SMALL BUSINESS INNOVATION ACT OF 2011 

TITLE 1–REAUTHORIZATION OF THE SBIR AND STTR PROGRAMS

Sec. 101. Extension Length This section extends the SBIR and STTR programs for three years until September 30, 2014. 

Sec. 102. SBIR and STTR Award Levels This section increases the size of 

SBIR and STTR awards from $100,000 to $150,000 for Phase I and 

from $750,000 to $1 million for Phase II, and requires the SBA to 

make annual adjustments of the award sizes for inflation. The provision prohibits any agency from issuing an SBIR or STTR award 

if the size of the award exceeds the award guidelines established 

in this section by more than 50 percent. Finally, the provision requires federal agencies to maintain the following information on 

awards exceeding the award guidelines: the award amount; a justification for exceeding the guidelines; the identity and location of 

the recipient; and whether or not the recipient firm received venture capital, hedge fund, or private equity firm investment; and if 

so, whether or not it is majority owned and controlled by one or 

more venture capital companies, hedge funds, or private equity 

firms. Nothing shall prevent a Federal agency from supplementing 

an award under the SBIR or STTR programs with Federal funds 

that are outside of the SBIR and STTR allocations. 

Sec. 103. Agency and Program Flexibility 

The section allows SBIR and STTR applicants to receive awards for subsequent 

SBIR or STTR phases at another agency and also allows small business concerns, 

which received SBIR or STTR awards, to receive awards for subsequent phases in 

either the STTR or SBIR program, respectively. 

Sec. 104. Elimination of Phase II Invitations 

This section requires that federal agencies conduct their solicitation of Phase II 

SBIR and STTR proposals without any invitation, pre-screening, pre-selection, or 

down-selection process between the first and second phase. 

Sec. 105. Phase Flexibility 

This section grants agencies the ability to provide a Phase II Award if the Agency 

finds that the small business concern has already completed the work typically done 

during Phase I. 

Sec. 106 and Sec. 107. Participation by Firms with Substantial Investment 

from Multiple Venture Capital Operating Companies in a Portion 

of the SBIR Program 

Section 106 allows the Departments of Health of Human Services and Energy and 

the National Science Foundation to permit firms majority owned and controlled by 

one or more venture capital companies, one or more hedge funds, or one or more 

private equity firms to compete for up to 45 percent of the Agency’s SBIR funds. 

All other qualifying federal agencies shall allow majority owned private investment 

backed small businesses to compete for up to 35 percent of the agency’s SBIR funds. 

Sec. 107 defines what affiliations are between various outside investors (such as 

venture capital companies, private equity firms, etc.) and small business concerns 

for purposes of determining whether the combination is eligible for an award under 

the SBIR program. 

Sec. 108. SBIR and STTR Special Acquisition Preference 

This section codifies the language from the SBIR and STTR Policy Directives confirming the intent of Congress to establish a special acquisition preference for SBIR 

and STTR Phase III awards. The provision clarifies that preference for contracts 

concerning research developed with SBIR or STTR funds should go to the developers 

and holders of SBIR and STTR technologies to the greatest extent practicable. 


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Sec. 109. Collaborating with Federal Laboratories and Research and Development Centers 

This section reduces the burden on cooperation between SBIR/STTR firms and 

federal laboratories by ensuring that such subcontracting is generally permitted 

without the requirement for a waiver. The provision also ensures that subcontracting to federal laboratories is not required of SBIR or STTR awardees. Finally, 

it clarifies that firms that have entered into a cooperative agreement with a federal 

laboratory are eligible to receive SBIR/STTR awards. 

Sec. 110. Notice Requirement 

This section ensures that the SBA is notified any time the SBIR or STTR policy 

directives are challenged in court. 

Sec. 111. Additional SBIR and STTR Awards 

The section allows SBIR and STTR applicants to receive one sequential Phase II 

award for a single project. It also requires agencies to verify that any activity to 

be performed with respect to a project with a Phase I and Phase II award has not 

been funded from another Federal agency. 

TITLE II–COMMERCIALIZATION AND OUTREACH INITIATIVES

Sec. 201. Technical assistance for awardees 

This section increases the amount of discretionary technical assistance that SBIR 

and STTR agencies can contract out to provide to awardees from $4,000 to $5,000 

for Phase I awards and from $4,000 to $5,000 per year for Phase II awards. The 

provision also states that this amount shall be in addition to the amount of the recipient’s award. It also requires agencies to provide SBIR and STTR award winners 

who wish to procure their own technical assistance with the allowable amount. Finally, the provision prohibits the agencies from using these funds to pay its contractor for technical assistance for SBIR or STTR awardees unless the contractor 

provides the technical assistance directly to the awardee designated by the award. 

Sec. 202. Commercialization Readiness Program at Department of Defense 

This section extends the SBIR Commercialization Pilot Program (CPP) at the Department of Defense permanently and extends it to the Department’s STTR program. It also changed the name to the Commercialization Readiness Program 

(CRP). The provision authorizes the Secretary of Defense to establish goals for 

transitioning Phase III technologies in subcontracting plans for contracts of $100 

million or more. The provision also requires the Secretary of Defense to set a goal 

to increase the number of Phase II contracts that lead to technology transition into 

programs of record or fielded systems and to use incentives to encourage agency program managers and prime contractors to meet that goal. Finally, the provision includes reporting requirements on the status of projects funded through CRP. 

Sec. 203. Commercialization Readiness Pilot Program for Civilian Agencies 

This section authorizes agencies other than the Department of Defense to create 

Commercialization Readiness Pilot Programs (using no more than ten percent of 

their program authorization) to support advanced development of small business 

technologies which are facing high manufacturing or regulatory costs. The provision 

authorizes these agencies to grant post-Phase II awards up to two times the regular 

size (up to $3 million). This section directs agencies making awards under this program to consider whether the technology to be supported by the award is likely to 

be manufactured in the United States. Authority to establish such a pilot program 

expires at the end of FY 2014. 

Sec. 204. Interagency Policy Committee 

This section directs the Office of Science and Technology Policy to establish an 

SBIR/STTR Interagency Policy Committee to review and make policy recommendations on ways to improve the effectiveness and efficiency of the SBIR and STTR programs. 

Sec. 205 Clarifying Definition of Phase III 

This section revises the definition of ‘‘Phase III’’ of the SBIR program so that it 

is clear that such work shall be directed toward commercial applications and derives 

from research and development completed in earlier phases. 


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Sec. 206. Shortened Period for Final Decisions on Proposals and Applications 

This section requires that not later than 90 days after, and if the Administrator 

authorizes an extension, then not later than 180 days, from the date on which the 

solicitation closes for SBIR and STTR programs, that the Administrator make a decision on each proposal submitted. This section specifies that the Director of the National Institutes of Health (NIH) and the Director of the National Science Foundation (NSF) may make an award under the SBIR or STTR programs only if an application for award undergoes a technical and scientific peer review. 

TITLE III–OVERSIGHT AND EVALUATION

Sec. 301. Streamlining Annual Evaluation Requirements 

This section requires the Administration to report at least annually to Congress 

the number of proposals received from firms with venture capital, private equity, 

or hedge fund investment, including those owned and controlled by multiple venture 

capital, private equity, or hedge fund firms. It also requires the Administration to 

report on efforts to increase outreach to firms owned and controlled by women and 

socially or economically disadvantaged individuals, the implementation and compliance with the allocation of funds for firms majority owned and controlled by multiple venture capital, private equity or hedge fund companies, and appeals of Phase 

III awards and notices of noncompliance with the SBIR and the STTR Policy Directives. Finally, the section requires the Administration to coordinate the implementation of electronic databases at the participating agencies. 

Sec. 302. Data Collection From Agencies for SBIR 

This section requires agencies with an SBIR program to collect data annually on 

several issues including: whether or not an applicant business or awardee has venture capital, private equity or hedge fund investment; if an applicant business is 

majority owned and controlled by multiple venture capital, private equity, or hedge 

fund firms; the amount of that outside capital it has received at the time of award; 

if an applicant business has foreign investors and who they are; if an applicant business is owned by a woman or by a socially or economically disadvantaged individual, 

and finally, whether an applicant has a university affiliation. The provision also requires agencies to justify awards given that exceed the statuary guidelines. Agencies 

must collect data and report annually on whether or not the award winner is from 

a state receiving less federal research funding for small businesses than a majority 

of other states. 

Sec. 303. Data Collection From Agencies for STTR 

This section requires agencies with an STTR program to collect data annually on 

several issues including: whether or not an applicant business or awardee has venture capital, private equity or hedge fund investment; if an applicant business is 

majority owned and controlled by multiple venture capital, private equity, or hedge 

fund firms; the amount of that outside capital it has received at the time of award; 

if an applicant business has foreign investors and who they are; if an applicant business is owned by a woman or by a socially or economically disadvantaged individual, 

and finally, whether an applicant has a university affiliation. The provision also requires agencies to justify awards given that exceed the statutory guidelines. 

Sec. 304. Public Database 

This section requires that the public database maintained by the Administrator 

include information on whether or not a firm receiving an award has venture capital, private equity or hedge fund investment, is majority owned and controlled by 

multiple venture capital, private equity, or hedge fund firms, the amount of outside 

capital it has received at the time of award, if it is owned by a woman or by a socially or economically disadvantaged individual, or if it has a university affiliation. 

Sec. 305. Government Database 

This section requires that the government database maintained by the Administrator in coordination with the agencies for the purposes of evaluation of the SBIR 

and STTR programs include information on the ownership structure and affiliations 

of awardee firms that have venture capital, private equity, or hedge fund investment, and that are majority owned and controlled by multiple venture capital, private equity, or hedge fund firms, whether or not a firm is owned by a woman, is 

owned by a minority, or has a university affiliation. 


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Sec. 306. Accuracy in Funding Base Calculations 

This section requires the Comptroller General of the United States to conduct an 

audit of the SBIR and STTR programs to determine whether federal agencies are 

complying with the expenditure requirements. 

Sec. 307. Continued Evaluation by the National Academy of Sciences 

This section authorizes the National Academy of Sciences to continue its evaluation of the SBIR program through the end of fiscal year 2021 and requires that updates of the studies be provided to Congress every four years from the date of enactment. This section requires the National Research Council (NRC) to estimate the 

number of jobs created in the United States as a result of the SBIR and STTR programs. 

Sec. 308. Technology Insertion Reporting Requirements 

This section requires the Administration to include in its annual report to Congress information on Phase III awards issued by SBIR and STTR agencies, including the dollar amount of these awards, their recipients, and the name of the agency 

or the component of the agency issuing them. 

Sec. 309. Obtaining Consent from SBIR and STTR Applicants to Release 

Contact Information to Economic Development Organizations 

This section requires each Federal agency that conducts an SBIR or STTR program to enable small business concerns that are SBIR or STTR applicants to indicate whether that Federal agency has consent to identify the small business concern 

to local and State-level economic development organizations. 

Sec. 310. Pilot to Allow Funding for Administrative, Oversight, and Contract Processing Costs 

This section requires that the Administrator allow each Federal agency to not use 

more than three percent of the funds allocated to the SBIR programs for the first 

fiscal year beginning after the enactment of this subsection, and each year thereafter through fiscal 2014, for costs relating to administrative, oversight, and contract processing activities for SBIR programs that the Federal agency was not carrying out the last full fiscal year before the enactment of this subsection, as well 

as for the period of three years after the enactment of this subsection, for the implementation of commercialization and outreach initiatives that were not in effect on 

the date of the enactment of this subsection. 

Sec. 311. GAO Study with Respect to Outside Investment Involvement 

This section requires that not later than two years after the date of the enactment 

of this Act, and every two years thereafter, the Comptroller General of the United 

States conduct a study on the impact of requirements relating to venture capital operating company, private equity firm, and hedge fund involvement in the SBIR and 

STTR programs. 

Sec. 312. Reducing Vulnerability of SBIR and STTR Programs to Fraud, 

Waste, and Abuse 

This section requires the Administrator to, not later than 90 days after the enactment of this Act, amend the SBIR Policy Directive and the STTR Policy Directive 

to include measures to prevent fraud, waste, and abuse. Critical provisions include: 

•Requiring Inspectors General of participating SBIR/STTR federal agencies to establish fraud detection measures, coordinate fraud-related information sharing between agencies, and provide fraud prevention-related education and training to 

agencies administering the program; 

•Requiring the Small Business Administrator to amend the SBIR and STTR Policy Directives to include specific measures to prevent fraud, waste, and abuse; 

•Creating a special SBIR/STTR telephone hotline that allows individuals to report 

fraud, waste, and abuse; 

•Ordering the Government Accountability Office (GAO) to conduct a study assessing the effectiveness of federal agencies in combating fraud, waste, and abuse in the 

SBIR and STTR programs. 

Sec. 313. Simplified Paperwork Requirements 

This section directs the SBA Administrator to issue regulations or guidelines to 

(the extent possible) standardize SBIR and STTR application paperwork. 


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TITLE IV–POLICY DIRECTIVES

Sec. 401. Conforming amendments to the SBIR and the STTR Policy Directives 

This section requires conforming amendments to the SBA’s SBIR and STTR Policy 

Directives within 180 days to implement the provisions of this Act. It also requires 

that the Administration publish the SBIR and STTR Policy Directives in the Code 

of Federal Regulations within 180 days. 

TITLE V–OTHER PROVISIONS

Sec. 501. Report on SBIR and STTR Program Goals 

This provision directs each federal agency required to participate in an SBIR or 

STTR program to: (1) develop metrics in conjunction with the Interagency Policy 

Committee described in Sec. 204 to evaluate the effectiveness and benefit of such 

program; (2) conduct an annual evaluation of their program using such metrics; and 

(3) report evaluation results annually to the Administrator and the relevant Congressional Committees. 

Sec. 502. Competitive Selection Procedures for SBIR and STTR Programs 

This section requires all SBIR or STTR funds to be awarded pursuant to competitive and merit-based selection procedures. 

Sec. 503. SBA Regulations on Loan Restrictions 

This section requires the SBA to develop regulations solely for purposes of the 

SBIR program that when or how restrictive covenants in loan agreements would 

constitute control for purposes of affiliation. 

Sec. 504 Program Diversification 

This section requires federal agencies to encourage applications from small business concerns located in rural areas, areas underrepresented in SBIR and STTR 

programs, and areas with unemployment rates greater than the national average, 

as well as business concerns owned or controlled by women, veterans, and minorities. 


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