NASA Advisory Council Recommendation 


Delays in Small Business Innovative Research! 


Small Business Technology Transfer (SBIRISTTR) Funding 


2011-02-09 (TIC-OI) 


Recommendation: 

Request that senior Agency leadership address issues surrounding the significant delays in 

FY 2010 and 2011 in funding SBIRJSTTR awardees and work to remedy these problems for 

FY 2012 and beyond. 

Major Reasons for the Recommendation: 

The 2010 determination ofseverability and subsequent cascading decisions regarding bona fide 

need provisions and funding rules have resulted in: (1) significant delays in funding ofnewstart projects; (2) very small funding increments while operating under Continuing Resolutions; 

(3) an overall inability for NASA to meet its Congressionally mandated annual funding 

obligations to small businesses; (4) reductions in the benefits NASA can gain from these 

projects; and (5) de-motivation ofinternal staff and potential partners. Since 2010, NASA 

issued only about 30% ofthe total funding intended for SBIRJSTTR. Over 200 SBIR Phase 2 

projects selected in October 2010 have not yet been funded as oflate April 2011; normally, 

SBIR Phase 2 projects selected in October are initiated in December and January. 

Consequences of No Action on the Recommendation: 

Additional delays in awards of SBIRJSTTR projects which will inhibit hundreds of small 


businesses from beginning important research and technology development for the Agency and 


its missions. 


NASA Response: 


NASA concurs with this recommendation. 


NASA's Office ofthe General Counsel (OGC), Office ofthe Chief Financial Officer (OCFO), 


and Office ofthe ChiefTechnologist (OCT) met in April and May to address this issue. An 


agreement-in-principle has been reached for revision ofthe SBIRJSTTR contract severability 


determination (pending final review and approval by the OCFO), which is one ofthe main 


issues behind the delays in initiating the NASA SBIRJSTTR contracts. Draft language for a 


new decision memorandum by the OCFO has been developed and is currently under review by 


OGC, OCFO, and OCT. Once finalized, NASA will forward the OCFO-signed memorandum 


on this issue to the Council and the Technology and Innovation Committee. 


In addition, the Agency's FY 2011 Initial Operating Plan has been submitted to Congress. The 


plan restores the funding that was transferred out ofthe SBIRJSTTR in the July 21, 2010, 


Operating Plan update, as a result ofthe FY 2010 change ofCross Agency Support (CAS) to 


one-year funding and the severability of SBIRJSTTR contracts. This restoration was 


committed to in the July 21,2010, Operating Plan update, but needed to wait until the FY 2011 


Initial Operating Plan to be implemented. With implementation, the SBIR and STTR programs 


Enclosure 
2 

will achieve a net zero change (across FY 2010 and FY 2011), thus meeting legally mandated 

funding levels. These funds have been authorized to be spent and released within the Science 

and Exploration accounts. For FY 2012 and out years, NASA has submitted proposed 

appropriations language with the FY 2012 Budget Request to help avoid this in the future by 

allowing CAS funding to remain available for two years.