SBIR and STTR Reauthorization and Improvement Act of 2016

To amend the Small Business Act to reauthorize and improve the Small Business Innovation Research Program and the Small Business Technology Transfer Program, and for other purposes. 1. Short title This Act may be cited as the SBIR and STTR Reauthorization and Improvement Act of 2016 2. Table of contents The table of contents for this Act is as follows: Sec. 1. Short title. Sec. 2. Table of contents. TITLE I—Reauthorization of programs Sec. 101. Permanency of SBIR program and STTR program. TITLE II—Enhanced small business access to Federal innovation investments Sec. 201. Allocation increases and transparency in base calculation. Sec. 202. Regular oversight of award amounts. TITLE III—Commercialization improvements Sec. 301. Permanency of the commercialization pilot program for civilian agencies. Sec. 302. Enforcement of national small business goal for Federal research and development. Sec. 303. Tracking rapid innovation fund awards in annual congressional report. Sec. 304. Intellectual property protection for technology development. Sec. 305. Annual GAO audit of compliance with commercialization goals. Sec. 306. Clarifying the Phase III preference. Sec. 307. Improvements to technical and business assistance. TITLE IV—Program diversification initiatives Sec. 401. Regional SBIR State collaborative initiative pilot program. Sec. 402. Federal and State Technology Partnership Program. TITLE V—Oversight and simplification initiatives Sec. 501. Data modernization summit. Sec. 502. Implementation of outstanding reauthorization provisions. Sec. 503. Strengthening of the requirement to shorten the application review and decision time. Sec. 504. Continued GAO oversight of allocation compliance and accuracy in funding base calculations. TITLE VI—Technical changes Sec. 601. Uniform reference to the Department of Health and Human Services. Sec. 602. Flexibility for Phase II award invitations. I Reauthorization of programs 101. Permanency of SBIR program and STTR program (a) SBIR Section 9(m) of the Small Business Act ( 15 U.S.C. 638(m) (1) in the subsection heading, by striking Termination SBIR program authorization (2) by striking terminate on September 30, 2017 be in effect for each fiscal year (b) STTR Section 9(n)(1)(A) of the Small Business Act ( 15 U.S.C. 638(n)(1)(A) through fiscal year 2017 II Enhanced small business access to Federal innovation investments 201. Allocation increases and transparency in base calculation (a) SBIR Section 9(f) of the Small Business Act ( 15 U.S.C. 638(f) (1) in paragraph (1)— (A) in the matter preceding subparagraph (A), by striking expend obligate for expenditure (B) in subparagraph (H), by striking and (C) in subparagraph (I), by striking and each fiscal year thereafter, (D) by inserting after subparagraph (I) the following: (J) for a Federal agency other than the Department of Defense— (i) not less than 3.5 percent of the extramural budget for research or research and development of the Federal agency in each of fiscal years 2018 and 2019; (ii) not less than 4 percent of such extramural in each of fiscal years 2020 and 2021; (iii) not less than 4.5 percent of such extramural in each of fiscal years 2022 and 2023; (iv) not less than 5 percent of such extramural in each of fiscal years 2024 and 2025; (v) not less than 5.5 percent of such extramural in each of fiscal years 2026 and 2027; and (vi) not less than 6 percent of such extramural in fiscal year 2028 and each fiscal year thereafter; and (K) for the Department of Defense— (i) not less than 2.5 percent of the budget for research and development of the Department of Defense in each of fiscal years 2018 and 2019; (ii) not less than 3 percent of such budget in each of fiscal years 2020 and 2021; (iii) not less than 3.5 percent of such budget in each of fiscal years 2022 and 2023; (iv) not less than 4 percent of such budget in each of fiscal years 2024 and 2025; (v) not less than 4.5 percent of such budget in each of fiscal years 2026 and 2027; and (vi) not less than 5 percent of such budget in fiscal year 2028 and each fiscal year thereafter, ; (2) in paragraph (2)(B), by inserting (or for the Department of Defense, an amount of the budget for basic research of the Department of Defense) research (3) in paragraph (4), by inserting (or for the Department of Defense an amount of the budget for research of the Department of Defense) of the agency (b) STTR Section 9(n)(1) of the Small Business Act ( 15 U.S.C. 638(n)(1) (1) in subparagraph (A)— (A) by striking expend obligate for expenditure (B) by striking not less than the percentage of that extramural budget specified in subparagraph (B) for a Federal agency other than the Department of Defense, not less than the percentage of that extramural budget specified in subparagraph (B) and, for the Department of Defense, not less than the percentage of the budget for research and development of the Department of Defense specified in subparagraph (B) (2) in subparagraph (B)— (A) in the matter preceding clause (i), by striking the extramural budget required to be expended by an agency the extramural budget, for a Federal agency other than the Department of Defense, and of the budget for research and development, for the Department of Defense, required to be obligated for expenditure with small business concerns (B) in clause (iv), by striking and (C) in clause (v), by striking fiscal year 2016 and each fiscal year thereafter. each of fiscal years 2016 and 2017; (D) by adding at the end the following: (vi) 0.55 percent for each of fiscal years 2018 and 2019; (vii) 0.65 percent for each of fiscal years 2020 and 2021; (viii) 0.75 percent for each of fiscal years 2022 and 2023; and (ix) 1 percent for fiscal year 2024 and each fiscal year thereafter. . 202. Regular oversight of award amounts (a) Elimination of automatic inflation adjustments Section 9(j) of the Small Business Act ( 15 U.S.C. 638(j) (1) in paragraph (2)(D), by inserting through fiscal year 2016 every year (2) by adding at the end the following: (4) 2016 modifications for dollar value of awards Not later than 120 days after the date of enactment of the SBIR and STTR Reauthorization and Improvement Act of 2016 (A) eliminate the annual adjustments for inflation of the dollar value of awards described in paragraph (2)(D); and (B) clarify that Congress intends to review the dollar value of awards every 3 fiscal years. . (b) Sense of Congress regarding regular review of the award sizes It is the sense of Congress that for fiscal year 2019, and every third fiscal year thereafter, Congress should evaluate whether the maximum award sizes under the Small Business Innovation Research Program under section 9 of the Small Business Act ( 15 U.S.C. 638 (c) Clarification of sequential Phase II awards Section 9(ff) of the Small Business Act ( 15 U.S.C. 638(ff) (3) Clarification of sequential Phase II awards The head of a Federal agency shall ensure that any sequential Phase II award is made in accordance with the limitations on award sizes under subsection (aa). . III Commercialization improvements 301. Permanency of the commercialization pilot program for civilian agencies Section 9(gg) of the Small Business Act ( 15 U.S.C. 638(gg) (1) in the subsection heading, by striking Pilot Program Commercialization development awards (2) by striking paragraphs (2), (7), and (8); (3) by redesignating paragraphs (3), (4), (5), and (6) as paragraphs (2), (3), (4), and (5), respectively; (4) by adding at the end the following: (6) Definitions In this subsection— (A) the term commercialization development program (B) 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 (5) by striking pilot program commercialization development program 302. Enforcement of national small business goal for Federal research and development Section 9(h) of the Small Business Act ( 15 U.S.C. 638(h) , which may not be less than 10 percent for fiscal year 2018, and each fiscal year thereafter, shall establish goals 303. Tracking rapid innovation fund awards in annual congressional report Section 9(b)(7) of the Small Business Act ( 15 U.S.C. 638(b)(7) (1) in subparagraph (F), by striking and (2) in subparagraph (G), by striking the period at the end and inserting ; and (3) by adding at the end the following: (H) information regarding awards under the Rapid Innovation Program under section 1073 of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 ( Public Law 111–383 10 U.S.C. 2359 (i) the number and dollar amount of awards made under the Rapid Innovation Program to business concerns receiving an award under the SBIR program or the STTR program; (ii) the proportion of awards under the Rapid Innovation Program made to business concerns receiving an award under the SBIR program or the STTR program; (iii) the proportion of awards under the Rapid Innovation Program made to small business concerns; and (iv) a projection of the effect on the number of awards under the Rapid Innovation Program if amounts to carry out the program were made available as a fixed allocation of the amount appropriated to the Department of Defense for research, development, test, and evaluation, excluding amounts appropriated for the defense universities; . 304. Intellectual property protection for technology development Section 9 of the Small Business Act ( 15 U.S.C. 638 (tt) Intellectual property protections (1) In general Subject to paragraph (2)(B), the cost of seeking protection for intellectual property, including a trademark, copyright, or patent, that was created through work performed under an SBIR or STTR award is allowable as an indirect cost under that award. (2) Clarification of patent costs (A) In general A Federal agency shall not directly or indirectly inhibit, through the policies, directives, or practices of the Federal agency, an otherwise eligible small business concern performing under an SBIR or STTR award from recovering patent costs incurred as requirements under that award, including— (i) the costs of preparing— (I) invention disclosures; (II) reports; and (III) other documents; (ii) the costs for searching the art to the extent necessary to make the invention disclosures; (iii) other costs in connection with the filing and prosecution of a United States patent application where title or royalty-free license is to be conveyed to the Federal Government; and (iv) general counseling services relating to patent matters, including advice on patent laws, regulations, clauses, and employee agreements. (B) Recovery limitations After consultation with contracting or auditing authorities, the patent costs described in subparagraph (A) shall be allowable for technology developed under a— (i) Phase I award, as indirect costs in an amount not greater than $5,000; (ii) Phase II award, as indirect costs in an amount not greater than $15,000; and (iii) Phase III award in which the Federal Government has government purpose rights (as defined in section 227.7103–5 of title 48, Code of Federal Regulations). . 305. Annual GAO audit of compliance with commercialization goals Section 9(nn) of the Small Business Act ( 15 U.S.C. 638(nn) (nn) Annual GAO report on Government compliance with goals, incentives, and Phase III preference Not later than 1 year after the date of enactment of the SBIR and STTR Reauthorization and Improvement Act of 2016 SBIR and STTR Reauthorization and Improvement Act of 2016 (1) discusses the status of the compliance of Federal agencies with the requirements or authorities established under— (A) subsection (h), relating to the establishment by certain Federal agencies of a goal for funding agreements for research and research and development with small business concerns; (B) subsection (y)(5)(A), relating to the requirement for the Department of Defense to establish goals for the transition of Phase III technologies in subcontracting plans; (C) subsection (y)(5)(B), relating to the requirement for the Department of Defense to establish procedures for a prime contractor to report the number and dollar amount of contracts with small business concerns for Phase III SBIR projects or STTR projects of the prime contractor; and (D) subsection (y)(6), relating to the requirement for the Department of Defense to set a goal to increase the number of Phase II SBIR and STTR contracts that transition into programs of record or fielded systems; (2) includes, for a Federal agency that is in compliance with a requirement described under paragraph (1), a description of how the Federal agency achieved compliance; and (3) includes a list, organized by Federal agency, of small business concerns that have asserted that— (A) technology of the small business concern was stolen by the Government or a prime contractor; or (B) the Federal agency solicited bids for a contract that was for work that derived from, extended, or completed efforts made under prior funding agreements under the SBIR program or STTR program. . 306. Clarifying the Phase III preference Section 9(r) of the Small Business Act ( 15 U.S.C. 638(r) (1) by striking paragraph (4); (2) by redesignating paragraph (2) as paragraph (4), and transferring such paragraph to after paragraph (3); and (3) by inserting after paragraph (1) the following: (2) Phase III award direction for agencies and prime contractors To the greatest extent practicable, Federal agencies and Federal prime contractors shall issue Phase III awards relating to technology, including sole source awards and awards under the Defense Research and Development Rapid Innovation Program under section 1073 of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 ( Public Law 111–383 10 U.S.C. 2359 . 307. Improvements to technical and business assistance Section 9(q) of the Small Business Act ( 15 U.S.C. 638(q) (1) in the subsection heading, by inserting and business technical (2) in paragraph (1)— (A) in the matter preceding subparagraph (A)— (i) by inserting and business assistance services (ii) by inserting assistance with product sales, intellectual property protections, market research, technologies, (B) in subparagraph (D), by inserting , including intellectual property protections (3) in paragraph (3)— (A) in subparagraph (A), by striking $5,000 per year $6,500 per project (B) in subparagraph (B), by striking $5,000 per year $15,000 per project (C) in subparagraph (C), by inserting or business technical (D) in subparagraph (D), by inserting or business technical IV Program diversification initiatives 401. Regional SBIR State collaborative initiative pilot program Section 9 of the Small Business Act ( 15 U.S.C. 638 (1) in subsection (mm)— (A) in paragraph (1), in the matter preceding subparagraph (A), by striking 2017 2021 (B) by adding at the end the following: (7) SBIR and STTR programs; FAST program (A) Definition In this paragraph, the term covered Federal agency (i) is required to conduct an SBIR program; and (ii) elects to use the funds allocated to the SBIR program of the Federal agency for the purposes described in paragraph (1). (B) Requirement Each covered Federal agency shall transfer an amount equal to 15 percent of the funds that are used for the purposes described in paragraph (1) to the Administration— (i) for the Regional SBIR State Collaborative Initiative Pilot Program established under subsection (uu); (ii) for the Federal and State Technology Partnership Program established under section 34; and (iii) to support the Office of the Administration that administers the SBIR program and the STTR program, subject to agreement from other agencies about how the funds will be used, in carrying out those programs and the programs described in clauses (i) and (ii). (8) Pilot program (A) In general Of amounts provided to the Administration under paragraph (7), not less than $5,000,000 shall be used to provide awards under the Regional SBIR State Collaborative Initiative Pilot Program established under subsection (uu) for each fiscal year in which the program is in effect. (B) Disbursement flexibility The Administration may use any unused funds made available under subparagraph (A) as of April 1 of each fiscal year for awards to carry out clauses (ii) and (iii) of paragraph (7)(B) after providing written notice to— (i) the Committee on Small Business and Entrepreneurship and the Committee on Appropriations of the Senate; and (ii) the Committee on Small Business and the Committee on Appropriations of the House of Representatives. ; and (2) by adding after subsection (tt), as added by section 304 of this Act, the following: (uu) Regional SBIR State collaborative initiative pilot program (1) Definitions In this subsection— (A) the term eligible entity (i) a research institution; and (ii) a small business concern; (B) the term eligible State (i) a State that the Administrator determines is in the bottom half of States, based on the average number of annual SBIR program awards made to companies in the State for the preceding 3 years for which the Administration has applicable data; and (ii) an EPSCoR State that— (I) is a State described in clause (i); or (II) is— (aa) not a State described in clause (i); and (bb) invited to participate in a regional collaborative; (C) the term EPSCoR State 42 U.S.C. 1862g (D) the term FAST program (E) the term pilot program (F) the term regional collaborative (G) the term State (2) Establishment The Administrator shall establish a pilot program, to be known as the Regional SBIR State Collaborative Initiative Pilot Program, under which the Administrator shall provide awards to regional collaboratives to address the needs of small business concerns in order to be more competitive in the proposal and selection process for awards under the SBIR program and the STTR program and to increase technology transfer and commercialization. (3) Goals The goals of the pilot program are— (A) to create regional collaboratives that allow eligible entities to work cooperatively to leverage resources to address the needs of small business concerns; (B) to grow SBIR program and STTR program cooperative research and development and commercialization through increased awards under those programs; (C) to increase the participation of States that have historically received a lower level of awards under the SBIR program and the STTR program; (D) to utilize the strengths and advantages of regional collaboratives to better leverage resources, best practices, and economies of scale in a region for the purpose of increasing awards and increasing the commercialization of the SBIR program and STTR projects; (E) to increase the competitiveness of the SBIR program and the STTR program; (F) to identify sources of outside funding for applicants for an award under the SBIR program or the STTR program, including venture capitalists, angel investor groups, private industry, crowd funding, and special loan programs; and (G) to offer increased one-on-one engagements with companies and entrepreneurs for SBIR program and STTR program education, assistance, and successful outcomes. (4) Application (A) In general A regional collaborative that desires to participate in the pilot program shall submit to the Administrator an application at such time, in such manner, and containing such information as the Administrator may require. (B) Inclusion of lead eligible entities and coordinator A regional collaborative shall include in an application submitted under subparagraph (A)— (i) the name of each lead eligible entity from each eligible State in the regional collaborative, as designated under paragraph (5)(A); and (ii) the name of the coordinator for the regional collaborative, as designated under paragraph (6). (C) Avoidance of duplication A regional collaborative shall include in an application submitted under subparagraph (A) an explanation as to how the activities of the regional collaborative under the pilot program would differ from other State and Federal outreach activities in each eligible State in the regional collaborative. (5) Lead eligible entity (A) In general Each eligible State in a regional collaborative shall designate 1 eligible entity located in the eligible State to serve as the lead eligible entity for the eligible State. (B) Authorization by Governor Each lead eligible entity designated under subparagraph (A) shall be authorized to act as the lead eligible entity by the Governor of the applicable eligible State. (C) Responsibilities Each lead eligible entity designated under subparagraph (A) shall be responsible for administering the activities and program initiatives described in paragraph (7) in the applicable eligible State. (6) Regional collaborative coordinator Each regional collaborative shall designate a coordinator from amongst the eligible entities located in the eligible States in the regional collaborative, who shall serve as the interface between the regional collaborative and the Administration with respect to measuring cross-State collaboration and program effectiveness and documenting best practices. (7) Use of Funds Each regional collaborative that is provided an award under the pilot program may, in each eligible State in which an eligible entity of the regional collaborative is located— (A) establish an initiative under which first-time applicants for an award under the SBIR program or the STTR program are reviewed by experienced, national experts in the United States, as determined by the lead eligible entity designated under paragraph (5)(A); (B) engage national mentors on a frequent basis to work directly with applicants for an award under the SBIR program or the STTR program, particularly during Phase II, to assist with the process of preparing and submitting a proposal; (C) create and make available an online mechanism to serve as a resource for applicants for an award under the SBIR program or the STTR program to identify and connect with Federal labs, prime government contractor companies, other industry partners, and regional industry cluster organizations; (D) conduct focused and concentrated outreach efforts to increase participation in the SBIR program and the STTR program by small business concerns owned and controlled by women, small business concerns owned and controlled by veterans, small business concerns owned and controlled by socially and economically disadvantaged individuals (as defined in section 8(d)(3)(C)), and historically black colleges and universities; (E) administer a structured program of training and technical assistance— (i) to prepare applicants for an award under the SBIR program or the STTR program— (I) to compete more effectively for Phase I and Phase II awards; and (II) to develop and implement a successful commercialization plan; (ii) to assist eligible States focusing on transition and commercialization to win Phase III awards from public and private partners; (iii) to create more competitive proposals to increase awards from all Federal sources, with a focus on awards under the SBIR program and the STTR program; and (iv) to assist first-time applicants by providing small grants for proof of concept research; and (F) assist applicants for an award under the SBIR program or the STTR program to identify sources of outside funding, including venture capitalists, angel investor groups, private industry, crowd funding, and special loan programs. (8) Award amount (A) In general The Administrator shall provide an award to each eligible State in which an eligible entity of a regional collaborative is located in an amount that is not more than $300,000 to carry out the activities described in paragraph (7). (B) Limitation (i) In general An eligible State may not receive an award under both the FAST program and the pilot program for the same year. (ii) Rule of construction Nothing in clause (i) shall be construed to prevent an eligible State from applying for an award under the FAST program and the pilot program for the same year. (9) Duration of award An award provided under the pilot program shall be for a period of not more than 1 year, and may be renewed by the Administrator for 1 additional year. (10) Termination The pilot program shall terminate on September 30, 2021. (11) Report Not later than February 1, 2021, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report on the pilot program, which shall include— (A) an assessment of the pilot program and the effectiveness of the pilot program in meeting the goals described in paragraph (3); (B) an assessment of the best practices, including an analysis of how the pilot program compares to the FAST program and a single-State approach; and (C) recommendations as to whether any aspect of the pilot program should be extended or made permanent. . 402. Federal and State Technology Partnership Program Section 34 of the Small Business Act ( 15 U.S.C. 657d (1) in subsection (h)— (A) in paragraph (1), by striking 2001 through 2005 2017 through 2021 (B) in paragraph (2), by striking fiscal years 2001 through 2005 each of fiscal years 2017 through 2021 (2) in subsection (i), by striking September 30, 2005 September 30, 2021 V Oversight and simplification initiatives 501. Data modernization summit (a) Definitions In this section— (1) the term Administration (2) the term Committee (3) the terms Federal agency SBIR STTR 15 U.S.C. 638(e) (4) the term participating Federal agency (5) the term phase 15 U.S.C. 638(e) (6) the term small business concern 15 U.S.C. 632 (b) Establishment There is established an interagency committee to be known as the SBIR and STTR Interagency Policy Committee (c) Membership The Committee shall include— (1) 2 representatives from each participating Federal agency, of which— (A) 1 shall have expertise with respect to the SBIR program and STTR program of the Federal agency; and (B) 1 shall have expertise with respect to the information technology systems of the Federal agency; and (2) 2 representatives from the Administration, of which— (A) 1 shall serve as chairperson of the Committee; and (B) 1 shall be from the Information Technology Development Team of the Office of Investment and Innovation of the Administration. (d) Duties The Committee shall review the recommendations made in the report to Congress by the Office of Science and Technology of the Administration entitled SBIR/STTR TechNet Public & Government Databases (1) determine how to collect data on achievements by small business concerns in each phase of the SBIR program and the STTR program and ensure collection and dissemination of such data in a timely, efficient, and uniform manner; (2) establish a uniform baseline for metrics that support improving the solicitation, contracting, funding, and execution of program management in the SBIR program and the STTR program; (3) normalize formatting and database usage across participating Federal agencies; and (4) determine the feasibility of developing a common system across all participating Federal agencies and the paperwork requirements under such a common system. (e) Implementation Not later than September 31, 2018, the Committee shall brief the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives on the solutions identified by the Committee under subsection (d) and resources needed to execute the solutions. 502. Implementation of outstanding reauthorization provisions (a) In general Section 9(mm) of the Small Business Act ( 15 U.S.C. 638(mm) (1) in paragraph (1), by striking paragraph (3) paragraphs (3) and (9) (2) by adding at the end the following: (9) Suspension of funding (A) For Federal agencies (i) In general For fiscal years 2018 and 2019, any Federal agency that has not implemented each provision of law described in clause (ii)— (I) shall continue to provide amounts to the Administration in accordance with paragraph (7)(B); and (II) may not use any additional amounts as described in paragraph (1) until 30 days after the date on which the Federal agency submits to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives documentation demonstrating that the Federal agency has implemented and is in compliance with each provision of law described in clause (ii). (ii) Provisions The provisions of law described in this subparagraph are the following: (I) Subsection (r)(4), relating to Phase III preferences. (II) Paragraphs (5) and (6) of subsection (y), relating to insertion goals. (III) Subsection (g)(4)(B), relating to shortening the decision time for SBIR awards. (IV) Subsection (o)(4)(B), relating to shortening the decision time for STTR awards. (V) Subsection (v), relating to reducing paperwork and compliance burdens. (B) For Administration For fiscal years 2018 and 2019, if the Administration is not in compliance with subsection (b)(7), relating to annual reports to Congress, the Administration may not use amounts received under paragraph (7)(B) of this subsection for a purpose described in clause (iii) of such paragraph (7)(B). . (b) Clarification of reporting requirement Section 9(b)(7) of the Small Business Act ( 15 U.S.C. 638(b)(7) not less than annually not later than February 1 of each year 503. Strengthening of the requirement to shorten the application review and decision time Section 9 of the Small Business Act ( 15 U.S.C. 638 (1) in subsection (g)(4), by striking subparagraph (B) and inserting the following: (B) make a final decision on each proposal submitted under the SBIR program— (i) for the Department of Health and Human Services, not later than 1 year after the date on which the applicable solicitation closes, with a goal to reduce the review and decision time to less than 10 months by September 30, 2019; (ii) for the Department of Agriculture and the National Science Foundation, not later than 6 months after the date on which the applicable solicitation closes; or (iii) for any other Federal agency— (I) not later than 90 days after the date on which the applicable solicitation closes; or (II) if the Administrator authorizes an extension with respect to a solicitation, not later than 90 days after the date that would otherwise be applicable to the Federal agency under subclause (I); ; and (2) in subsection (o)(4), by striking subparagraph (B) and inserting the following: (B) make a final decision on each proposal submitted under the STTR program— (i) for the Department of Health and Human Services, not later than 1 year after the date on which the applicable solicitation closes, with a goal to reduce the review and decision time to less than 10 months by September 30, 2019; (ii) for the Department of Agriculture and the National Science Foundation, not later than 6 months after the date on which the applicable solicitation closes; or (iii) for any other Federal agency— (I) not later than 90 days after the date on which the applicable solicitation closes; or (II) if the Administrator authorizes an extension with respect to a solicitation, not later than 90 days after the date that would otherwise be applicable to the Federal agency under subclause (I); . 504. Continued GAO oversight of allocation compliance and accuracy in funding base calculations Section 5136(a) of the National Defense Authorization Act for Fiscal Year 2012 ( 15 U.S.C. 638 (1) in the matter preceding paragraph (1), by striking until the date that is 5 years after the date of enactment of this Act until the date on which the Comptroller General of the United States submits the report relating to fiscal year 2019 (2) in paragraph (1), by striking subparagraph (C) and inserting the following: (C) assess whether the change in the base funding for the Department of Defense as required by subparagraphs (J) and (K) of section 9(f)(1) of the Small Business Act ( 15 U.S.C. 638(f)(1) (i) improves transparency for determining whether the Department is complying with the allocation requirements; (ii) reduces the burden of calculating the allocations; and (iii) improves the compliance of the Department with the allocation requirements; and ; and (3) in paragraph (2) by striking under subparagraph (B) under subparagraphs (B) and (C) VI Technical changes 601. Uniform reference to the Department of Health and Human Services Section 9 of the Small Business Act ( 15 U.S.C. 638 (1) in subsection (cc), by striking National Institutes of Health Department of Health and Human Services (2) in subsection (dd)(1)(A), by striking Director of the National Institutes of Health Secretary of Health and Human Services 602. Flexibility for Phase II award invitations Section 9(e)(4)(B) of the Small Business Act ( 15 U.S.C. 638(e)(4)(B) (1) by striking , which shall not include any invitation, pre-screening, or pre-selection process for eligibility for Phase II, (2) by inserting in which eligibility for an award shall not be based only on an invitation, pre-screening, or pre-selection process and in which awards 1. Short title This Act may be cited as the SBIR and STTR Reauthorization and Improvement Act of 2016 2. Table of contents The table of contents for this Act is as follows: Sec. 1. Short title. Sec. 2. Table of contents. TITLE I—Reauthorization of programs Sec. 101. Permanency of SBIR program and STTR program. TITLE II—Enhanced small business access to Federal innovation investments Sec. 201. Allocation increases and transparency in base calculation. Sec. 202. Regular oversight of award amounts. TITLE III—Commercialization improvements Sec. 301. Permanency of the commercialization pilot program for civilian agencies. Sec. 302. Enforcement of national small business goal for Federal research and development. Sec. 303. Tracking rapid innovation fund awards in annual congressional report. Sec. 304. Intellectual property protection for technology development. Sec. 305. Annual GAO audit of compliance with commercialization goals. Sec. 306. Clarifying the Phase III preference. Sec. 307. Improvements to technical and business assistance. TITLE IV—Program diversification initiatives Sec. 401. Regional SBIR State collaborative initiative pilot program. Sec. 402. Federal and State Technology Partnership Program. TITLE V—Oversight and simplification initiatives Sec. 501. Data modernization summit. Sec. 502. Implementation of outstanding reauthorization provisions. Sec. 503. Strengthening of the requirement to shorten the application review and decision time. Sec. 504. Continued GAO oversight of allocation compliance and accuracy in funding base calculations. TITLE VI—Participation by women and minorities Sec. 601. SBA coordination on increasing outreach for women and minority-owned businesses. Sec. 602. Federal agency outreach requirements for women and minority-owned businesses. Sec. 603. STTR policy directive modification. Sec. 604. Interagency SBIR/STTR Policy Committee. Sec. 605. Diversity and STEM workforce development pilot program. TITLE VII—Technical changes Sec. 701. Uniform reference to the Department of Health and Human Services. Sec. 702. Flexibility for Phase II award invitations. I Reauthorization of programs 101. Permanency of SBIR program and STTR program (a) SBIR Section 9(m) of the Small Business Act ( 15 U.S.C. 638(m) (1) in the subsection heading, by striking Termination SBIR program authorization (2) by striking terminate on September 30, 2017 be in effect for each fiscal year (b) STTR Section 9(n)(1)(A) of the Small Business Act ( 15 U.S.C. 638(n)(1)(A) through fiscal year 2017 II Enhanced small business access to Federal innovation investments 201. Allocation increases and transparency in base calculation (a) SBIR Section 9(f) of the Small Business Act ( 15 U.S.C. 638(f) (1) in paragraph (1)— (A) in the matter preceding subparagraph (A), by striking expend obligate for expenditure (B) in subparagraph (H), by striking and (C) in subparagraph (I), by striking and each fiscal year thereafter, (D) by inserting after subparagraph (I) the following: (J) for a Federal agency other than the Department of Defense— (i) not less than 3.5 percent of the extramural budget for research or research and development of the Federal agency in each of fiscal years 2018 and 2019; (ii) not less than 4 percent of such extramural budget in each of fiscal years 2020 and 2021; (iii) not less than 4.5 percent of such extramural budget in each of fiscal years 2022 and 2023; (iv) not less than 5 percent of such extramural budget in each of fiscal years 2024 and 2025; (v) not less than 5.5 percent of such extramural budget in each of fiscal years 2026 and 2027; and (vi) not less than 6 percent of such extramural budget in fiscal year 2028 and each fiscal year thereafter; and (K) for the Department of Defense— (i) not less than 2.5 percent of the budget for research, development, test, and evaluation of the Department of Defense in each of fiscal years 2018 and 2019; (ii) not less than 3 percent of such budget in each of fiscal years 2020 and 2021; (iii) not less than 3.5 percent of such budget in each of fiscal years 2022 and 2023; (iv) not less than 4 percent of such budget in each of fiscal years 2024 and 2025; (v) not less than 4.5 percent of such budget in each of fiscal years 2026 and 2027; and (vi) not less than 5 percent of such budget in fiscal year 2028 and each fiscal year thereafter, ; (2) in paragraph (2)(B), by inserting (or for the Department of Defense, an amount of the budget for basic research of the Department of Defense) research (3) in paragraph (4), by inserting (or for the Department of Defense an amount of the budget for research, development, test, and evaluation of the Department of Defense) of the agency (b) STTR Section 9(n)(1) of the Small Business Act ( 15 U.S.C. 638(n)(1) (1) in subparagraph (A)— (A) by striking expend obligate for expenditure (B) by striking not less than the percentage of that extramural budget specified in subparagraph (B) for a Federal agency other than the Department of Defense, not less than the percentage of that extramural budget specified in subparagraph (B) and, for the Department of Defense, not less than the percentage of the budget for research, development, test, and evaluation of the Department of Defense specified in subparagraph (B) (2) in subparagraph (B)— (A) in the matter preceding clause (i), by striking the extramural budget required to be expended by an agency the extramural budget, for a Federal agency other than the Department of Defense, and of the budget for research, development, test, and evaluation, for the Department of Defense, required to be obligated for expenditure with small business concerns (B) in clause (iv), by striking and (C) in clause (v), by striking fiscal year 2016 and each fiscal year thereafter. each of fiscal years 2016 and 2017; (D) by adding at the end the following: (vi) 0.55 percent for each of fiscal years 2018 and 2019; (vii) 0.65 percent for each of fiscal years 2020 and 2021; (viii) 0.75 percent for each of fiscal years 2022 and 2023; and (ix) 1 percent for fiscal year 2024 and each fiscal year thereafter. . 202. Regular oversight of award amounts (a) Elimination of automatic inflation adjustments Section 9(j) of the Small Business Act ( 15 U.S.C. 638(j) (1) in paragraph (2)(D), by inserting through fiscal year 2016 every year (2) by adding at the end the following: (4) 2016 modifications for dollar value of awards Not later than 120 days after the date of enactment of the SBIR and STTR Reauthorization and Improvement Act of 2016 (A) eliminate the annual adjustments for inflation of the dollar value of awards described in paragraph (2)(D); and (B) clarify that Congress intends to review the dollar value of awards every 3 fiscal years. . (b) Sense of Congress regarding regular review of the award sizes It is the sense of Congress that for fiscal year 2019, and every third fiscal year thereafter, Congress should evaluate whether the maximum award sizes under the Small Business Innovation Research Program and the Small Business Technology Transfer Program under section 9 of the Small Business Act ( 15 U.S.C. 638 (c) Clarification of sequential Phase II awards Section 9(ff) of the Small Business Act ( 15 U.S.C. 638(ff) (3) Clarification of sequential Phase II awards The head of a Federal agency shall ensure that any sequential Phase II award is made in accordance with the limitations on award sizes under subsection (aa). (4) Cross-agency sequential Phase II awards A small business concern that receives a sequential Phase II SBIR or Phase II STTR award for a project from a Federal agency is eligible to receive an additional sequential Phase II award that continues work on that project from another Federal agency. . III Commercialization improvements 301. Permanency of the commercialization pilot program for civilian agencies Section 9(gg) of the Small Business Act ( 15 U.S.C. 638(gg) (1) in the subsection heading, by striking Pilot Program Commercialization development awards (2) by striking paragraphs (2), (7), and (8); (3) by redesignating paragraphs (3), (4), (5), and (6) as paragraphs (2), (3), (4), and (5), respectively; (4) by adding at the end the following: (6) Definitions In this subsection— (A) the term commercialization development program (B) 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 (5) by striking pilot program commercialization development program 302. Enforcement of national small business goal for Federal research and development Section 9(h) of the Small Business Act (15 U.S.C. 638 (h)) is amended by inserting , which may not be less than 10 percent for fiscal year 2018, and each fiscal year thereafter, shall establish goals 303. Tracking rapid innovation fund awards in annual congressional report Section 9(b)(7) of the Small Business Act ( 15 U.S.C. 638(b)(7) (1) in subparagraph (F), by striking and (2) in subparagraph (G), adding and (3) by adding at the end the following: (H) information regarding awards under the Rapid Innovation Program under section 1073 of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 ( Public Law 111–383 10 U.S.C. 2359 (i) the number and dollar amount of awards made under the Rapid Innovation Program to business concerns receiving an award under the SBIR program or the STTR program; (ii) the proportion of awards under the Rapid Innovation Program made to business concerns receiving an award under the SBIR program or the STTR program; (iii) the proportion of awards under the Rapid Innovation Program made to small business concerns; and (iv) a projection of the effect on the number of awards under the Rapid Innovation Program if amounts to carry out the program were made available as a fixed allocation of the amount appropriated to the Department of Defense for research, development, test, and evaluation, excluding amounts appropriated for the defense universities; . 304. Intellectual property protection for technology development Section 9 of the Small Business Act ( 15 U.S.C. 638 (tt) Intellectual property protections (1) In general Subject to paragraph (2)(B), the cost of seeking protection for intellectual property, including a trademark, copyright, or patent, that was created through work performed under an SBIR or STTR award is allowable as an indirect cost under that award. (2) Clarification of patent costs (A) In general A Federal agency shall not directly or indirectly inhibit, through the policies, directives, or practices of the Federal agency, an otherwise eligible small business concern performing under an SBIR or STTR award from recovering patent costs incurred as requirements under that award, including— (i) the costs of preparing— (I) invention disclosures; (II) reports; and (III) other documents; (ii) the costs for searching the art to the extent necessary to make the invention disclosures; (iii) other costs in connection with the filing and prosecution of a United States patent application where title or royalty-free license is to be conveyed to the Federal Government; and (iv) general counseling services relating to patent matters, including advice on patent laws, regulations, clauses, and employee agreements. (B) Recovery limitations After consultation with contracting or auditing authorities, the patent costs described in subparagraph (A) shall be allowable for technology developed under a— (i) Phase I award, as indirect costs in an amount not greater than $5,000; (ii) Phase II award, as indirect costs in an amount not greater than $15,000; and (iii) Phase III award in which the Federal Government has government purpose rights (as defined in section 227.7103-5 of title 48, Code of Federal Regulations). . 305. Annual GAO audit of compliance with commercialization goals Section 9(nn) of the Small Business Act ( 15 U.S.C. 638(nn) (nn) Annual GAO report on Government compliance with goals, incentives, and Phase III preference Not later than 1 year after the date of enactment of the SBIR and STTR Reauthorization and Improvement Act of 2016 SBIR and STTR Reauthorization and Improvement Act of 2016 (1) discusses the status of the compliance of Federal agencies with the requirements or authorities established under— (A) subsection (h), relating to the establishment by certain Federal agencies of a goal for funding agreements for research and research and development with small business concerns; (B) subsection (y)(5)(A), relating to the requirement for the Department of Defense to establish goals for the transition of Phase III technologies in subcontracting plans; (C) subsection (y)(5)(B), relating to the requirement for the Department of Defense to establish procedures for a prime contractor to report the number and dollar amount of contracts with small business concerns for Phase III SBIR projects or STTR projects of the prime contractor; and (D) subsection (y)(6), relating to the requirement for the Department of Defense to set a goal to increase the number of Phase II SBIR and STTR contracts that transition into programs of record or fielded systems; (2) includes, for a Federal agency that is in compliance with a requirement described under paragraph (1), a description of how the Federal agency achieved compliance; and (3) includes a list, organized by Federal agency, of small business concerns that have asserted that— (A) the Government or prime contractor— (i) did not protect the intellectual property of the small business concern in accordance with data rights under the SBIR or STTR award; or (ii) issued a Phase III SBIR or STTR award conditional on relinquishing data rights; (B) the Federal agency solicited bids for a contract, or provided funding to an entity other than the small business concern receiving the SBIR or STTR award, that was for work that derived from, extended, or completed efforts made under prior funding agreements under the SBIR program or STTR program; (C) the Government or prime contractor did not comply with the SBIR and STTR policy directives and the small business concern filed a comment or complaint to the Office of the National Ombudsman or appealed to the Administrator for intervention; or (D) the Federal agency did not comply with subsection (g)(12) or (o)(16) requiring timely notice to the Administrator of any case or controversy before any Federal judicial or administrative tribunal concerning the SBIR program or the STTR program of the Federal agency. . 306. Clarifying the Phase III preference Section 9(r) of the Small Business Act ( 15 U.S.C. 638(r) (1) by striking paragraph (4); (2) by redesignating paragraph (2) as paragraph (4), and transferring such paragraph to after paragraph (3); and (3) by inserting after paragraph (1) the following: (2) Phase III award direction for agencies and prime contractors To the greatest extent practicable, Federal agencies and Federal prime contractors shall issue Phase III awards relating to technology, including sole source awards and awards under the Defense Research and Development Rapid Innovation Program under section 1073 of the Ike Skelton National Defense Authorization Act for Fiscal Year 2011 ( Public Law 111–383 10 U.S.C. 2359 . 307. Improvements to technical and business assistance Section 9(q) of the Small Business Act ( 15 U.S.C. 638(q) (1) in the subsection heading, by inserting and business technical (2) in paragraph (1)— (A) in the matter preceding subparagraph (A)— (i) by striking a vendor selected under paragraph (2) 1 or more vendors selected under paragraph (2)(A) (ii) by inserting and business assistance services (iii) by inserting assistance with product sales, intellectual property protections, market research, market validation, and development of regulatory plans and manufacturing plans, technologies, (B) in subparagraph (D), by inserting , including intellectual property protections (3) in paragraph (2)— (A) by striking Each agency may select a vendor to assist small business concerns to meet (A) In general Each agency may select 1 or more vendors from which small business concerns may obtain assistance in meeting ; and (B) by adding at the end the following: (B) Selection by small business concern A small business concern may, by contract or otherwise, select 1 or more vendors to assist the small business concern in meeting the goals listed in paragraph (1). ; and (4) in paragraph (3)— (A) by inserting (A) paragraph (2) (B) in subparagraph (A), by striking $5,000 per year $6,500 per project (C) in subparagraph (B)— (i) by striking $5,000 per year $35,000 per project (ii) in clause (ii), by striking which shall be in addition to the amount of the recipient's award which may, as determined appropriate by the head of the Federal agency, be included as part of the recipient's award or be in addition to the amount of the recipient's award (D) in subparagraph (C)— (i) by inserting or business technical (ii) by striking the vendor a vendor (iii) by adding at the end the following: Business-related services aimed at improving the commercialization success of a small business concern may be obtained from an entity, such as a public or private organization or an agency of or other entity established or funded by a State that facilitates or accelerates the commercialization of technologies or assists in the creation and growth of private enterprises that are commercializing technology. (E) in subparagraph (D)— (i) by inserting or business technical (ii) in clause (i)— (I) by striking the vendor 1 or more vendors (II) by striking provides provide (F) by adding at the end the following: (E) Multiple award recipients The Administrator shall establish a limit on the amount of technical and business assistance services that may be received or purchased under subparagraph (B) by small business concerns with respect to multiple Phase II SBIR or STTR awards for a fiscal year. . IV Program diversification initiatives 401. Regional SBIR State collaborative initiative pilot program Section 9 of the Small Business Act ( 15 U.S.C. 638 (1) in subsection (mm)— (A) in paragraph (1)— (i) in the matter preceding subparagraph (A), by striking 2017 2021 (ii) in subparagraph (I), by striking and (iii) in subparagraph (J), by striking the period and inserting ; and (iv) by adding at the end the following: (K) funding for improvements that increase commonality across data systems, reduce redundancy, and improve data oversight and accuracy. ; and (B) by adding at the end the following: (7) SBIR and STTR programs; FAST program (A) Definition In this paragraph, the term covered Federal agency (i) is required to conduct an SBIR program; and (ii) elects to use the funds allocated to the SBIR program of the Federal agency for the purposes described in paragraph (1). (B) Requirement Each covered Federal agency shall transfer an amount equal to 15 percent of the funds that are used for the purposes described in paragraph (1) to the Administration— (i) for the Regional SBIR State Collaborative Initiative Pilot Program established under subsection (uu); (ii) for the Federal and State Technology Partnership Program established under section 34; and (iii) to support the Office of the Administration that administers the SBIR program and the STTR program, subject to agreement from other agencies about how the funds will be used, in carrying out those programs and the programs described in clauses (i) and (ii). (8) Pilot program (A) In general Of amounts provided to the Administration under paragraph (7), not less than $5,000,000 shall be used to provide awards under the Regional SBIR State Collaborative Initiative Pilot Program established under subsection (uu) for each fiscal year in which the program is in effect. (B) Disbursement flexibility The Administration may use any unused funds made available under subparagraph (A) as of April 1 of each fiscal year for awards to carry out clauses (ii) and (iii) of paragraph (7)(B) after providing written notice to— (i) the Committee on Small Business and Entrepreneurship and the Committee on Appropriations of the Senate; and (ii) the Committee on Small Business and the Committee on Appropriations of the House of Representatives. ; and (2) by adding after subsection (tt), as added by section 304 of this Act, the following: (uu) Regional SBIR State collaborative initiative pilot program (1) Definitions In this subsection— (A) the term eligible entity (i) a research institution; and (ii) a small business concern; (B) the term eligible State (i) a State that the Administrator determines is in the bottom half of States, based on the average number of annual SBIR program awards made to companies in the State for the preceding 3 years for which the Administration has applicable data; and (ii) an EPSCoR State that— (I) is a State described in clause (i); or (II) is— (aa) not a State described in clause (i); and (bb) invited to participate in a regional collaborative; (C) the term EPSCoR State 42 U.S.C. 1862g (D) the term FAST program (E) the term pilot program (F) the term regional collaborative (G) the term State (2) Establishment The Administrator shall establish a pilot program, to be known as the Regional SBIR State Collaborative Initiative Pilot Program, under which the Administrator shall provide awards to regional collaboratives to address the needs of small business concerns in order to be more competitive in the proposal and selection process for awards under the SBIR program and the STTR program and to increase technology transfer and commercialization. (3) Goals The goals of the pilot program are— (A) to create regional collaboratives that allow eligible entities to work cooperatively to leverage resources to address the needs of small business concerns; (B) to grow SBIR program and STTR program cooperative research and development and commercialization through increased awards under those programs; (C) to increase the participation of States that have historically received a lower level of awards under the SBIR program and the STTR program; (D) to utilize the strengths and advantages of regional collaboratives to better leverage resources, best practices, and economies of scale in a region for the purpose of increasing awards and increasing the commercialization of the SBIR program and STTR projects; (E) to increase the competitiveness of the SBIR program and the STTR program; (F) to identify sources of outside funding for applicants for an award under the SBIR program or the STTR program, including venture capitalists, angel investor groups, private industry, crowd funding, and special loan programs; and (G) to offer increased one-on-one engagements with companies and entrepreneurs for SBIR program and STTR program education, assistance, and successful outcomes. (4) Application (A) In general A regional collaborative that desires to participate in the pilot program shall submit to the Administrator an application at such time, in such manner, and containing such information as the Administrator may require. (B) Inclusion of lead eligible entities and coordinator A regional collaborative shall include in an application submitted under subparagraph (A)— (i) the name of each lead eligible entity from each eligible State in the regional collaborative, as designated under paragraph (5)(A); and (ii) the name of the coordinator for the regional collaborative, as designated under paragraph (6). (C) Avoidance of duplication A regional collaborative shall include in an application submitted under subparagraph (A) an explanation as to how the activities of the regional collaborative under the pilot program would differ from other State and Federal outreach activities in each eligible State in the regional collaborative. (5) Lead eligible entity (A) In general Each eligible State in a regional collaborative shall designate 1 eligible entity located in the eligible State to serve as the lead eligible entity for the eligible State. (B) Authorization by Governor Each lead eligible entity designated under subparagraph (A) shall be authorized to act as the lead eligible entity by the Governor of the applicable eligible State. (C) Responsibilities Each lead eligible entity designated under subparagraph (A) shall be responsible for administering the activities and program initiatives described in paragraph (7) in the applicable eligible State. (6) Regional collaborative coordinator Each regional collaborative shall designate a coordinator from amongst the eligible entities located in the eligible States in the regional collaborative, who shall serve as the interface between the regional collaborative and the Administration with respect to measuring cross-State collaboration and program effectiveness and documenting best practices. (7) Use of Funds Each regional collaborative that is provided an award under the pilot program may, in each eligible State in which an eligible entity of the regional collaborative is located— (A) establish an initiative under which first-time applicants for an award under the SBIR program or the STTR program are reviewed by experienced, national experts in the United States, as determined by the lead eligible entity designated under paragraph (5)(A); (B) engage national mentors on a frequent basis to work directly with applicants for an award under the SBIR program or the STTR program, particularly during Phase II, to assist with the process of preparing and submitting a proposal; (C) create and make available an online mechanism to serve as a resource for applicants for an award under the SBIR program or the STTR program to identify and connect with Federal labs, prime government contractor companies, other industry partners, and regional industry cluster organizations; (D) conduct focused and concentrated outreach efforts to increase participation in the SBIR program and the STTR program by small business concerns owned and controlled by women, small business concerns owned and controlled by veterans, small business concerns owned and controlled by socially and economically disadvantaged individuals (as defined in section 8(d)(3)(C)), and historically black colleges and universities; (E) administer a structured program of training and technical assistance— (i) to prepare applicants for an award under the SBIR program or the STTR program— (I) to compete more effectively for Phase I and Phase II awards; and (II) to develop and implement a successful commercialization plan; (ii) to assist eligible States focusing on transition and commercialization to win Phase III awards from public and private partners; (iii) to create more competitive proposals to increase awards from all Federal sources, with a focus on awards under the SBIR program and the STTR program; and (iv) to assist first-time applicants by providing small grants for proof of concept research; and (F) assist applicants for an award under the SBIR program or the STTR program to identify sources of outside funding, including venture capitalists, angel investor groups, private industry, crowd funding, and special loan programs. (8) Award amount (A) In general The Administrator shall provide an award to each eligible State in which an eligible entity of a regional collaborative is located in an amount that is not more than $300,000 to carry out the activities described in paragraph (7). (B) Limitation (i) In general An eligible State may not receive an award under both the FAST program and the pilot program for the same year. (ii) Rule of construction Nothing in clause (i) shall be construed to prevent an eligible State from applying for an award under the FAST program and the pilot program for the same year. (9) Duration of award An award provided under the pilot program shall be for a period of not more than 1 year, and may be renewed by the Administrator for 1 additional year. (10) Termination The pilot program shall terminate on September 30, 2021. (11) Report Not later than February 1, 2021, the Administrator shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives a report on the pilot program, which shall include— (A) an assessment of the pilot program and the effectiveness of the pilot program in meeting the goals described in paragraph (3); (B) an assessment of the best practices, including an analysis of how the pilot program compares to the FAST program and a single-State approach; and (C) recommendations as to whether any aspect of the pilot program should be extended or made permanent. . 402. Federal and State Technology Partnership Program Section 34 of the Small Business Act ( 15 U.S.C. 657d (1) in subsection (h)— (A) in paragraph (1), by striking 2001 through 2005 2017 through 2021 (B) in paragraph (2), by striking fiscal years 2001 through 2005 each of fiscal years 2017 through 2021 (2) in subsection (i), by striking September 30, 2005 September 30, 2021 V Oversight and simplification initiatives 501. Data modernization summit (a) Definitions In this section— (1) the term Administration (2) the term Committee (3) the terms Federal agency SBIR STTR 15 U.S.C. 638(e) (4) the term participating Federal agency (5) the term phase 15 U.S.C. 638(e) (6) the term small business concern 15 U.S.C. 632 (b) Establishment There is established an interagency committee to be known as the SBIR and STTR Interagency Policy Committee (c) Membership The Committee shall include— (1) 2 representatives from each participating Federal agency, of which— (A) 1 shall have expertise with respect to the SBIR program and STTR program of the Federal agency; and (B) 1 shall have expertise with respect to the information technology systems of the Federal agency; and (2) 2 representatives from the Administration, of which— (A) 1 shall serve as chairperson of the Committee; and (B) 1 shall be from the Information Technology Development Team of the Office of Investment and Innovation of the Administration. (d) Duties The Committee shall review the recommendations made in the report to Congress by the Office of Science and Technology of the Administration entitled SBIR/STTR TechNet Public & Government Databases (1) determine how to collect data on achievements by small business concerns in each phase of the SBIR program and the STTR program and ensure collection and dissemination of such data in a timely, efficient, and uniform manner; (2) establish a uniform baseline for metrics that support improving the solicitation, contracting, funding, and execution of program management in the SBIR program and the STTR program; (3) normalize formatting and database usage across participating Federal agencies; and (4) determine the feasibility of developing a common system across all participating Federal agencies and the paperwork requirements under such a common system. (e) Implementation Not later than September 31, 2018, the Committee shall brief the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives on the solutions identified by the Committee under subsection (d) and resources needed to execute the solutions. 502. Implementation of outstanding reauthorization provisions (a) In general Section 9(mm) of the Small Business Act ( 15 U.S.C. 638(mm) (1) in paragraph (1), by striking paragraph (3) paragraphs (3) and (9) (2) by adding at the end the following: (9) Suspension of funding (A) For Federal agencies (i) In general For fiscal years 2018 and 2019, any Federal agency that has not implemented each provision of law described in clause (ii)— (I) shall continue to provide amounts to the Administration in accordance with paragraph (7)(B); and (II) may not use any additional amounts as described in paragraph (1) until 30 days after the date on which the Federal agency submits to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives documentation demonstrating that the Federal agency has implemented and is in compliance with each provision of law described in clause (ii). (ii) Provisions The provisions of law described in this subparagraph are the following: (I) Subsection (r)(4), relating to Phase III preferences. (II) Paragraphs (5) and (6) of subsection (y), relating to insertion goals. (III) Subsection (g)(4)(B), relating to shortening the decision time for SBIR awards. (IV) Subsection (o)(4)(B), relating to shortening the decision time for STTR awards. (V) Subsection (v), relating to reducing paperwork and compliance burdens. (B) For Administration For fiscal years 2018 and 2019, if the Administration is not in compliance with subsection (b)(7), relating to annual reports to Congress, the Administration may not use amounts received under paragraph (7)(B) of this subsection for a purpose described in clause (iii) of such paragraph (7)(B). . (b) Clarification of reporting requirement Section 9(b)(7) of the Small Business Act ( 15 U.S.C. 638(b)(7) not less than annually not later than December 31 of each year 503. Strengthening of the requirement to shorten the application review and decision time Section 9 of the Small Business Act ( 15 U.S.C. 638 (1) in subsection (g)(4), by striking subparagraph (B) and inserting the following: (B) make a final decision on each proposal submitted under the SBIR program— (i) for the Department of Health and Human Services, not later than 1 year after the date on which the applicable solicitation closes, with a goal to reduce the review and decision time to less than 10 months by September 30, 2019; (ii) for the Department of Agriculture and the National Science Foundation, not later than 6 months after the date on which the applicable solicitation closes; or (iii) for any other Federal agency— (I) not later than 90 days after the date on which the applicable solicitation closes; or (II) if the Administrator authorizes an extension with respect to a solicitation, not later than 90 days after the date that would otherwise be applicable to the Federal agency under subclause (I); ; and (2) in subsection (o)(4), by striking subparagraph (B) and inserting the following: (B) make a final decision on each proposal submitted under the STTR program— (i) for the Department of Health and Human Services, not later than 1 year after the date on which the applicable solicitation closes, with a goal to reduce the review and decision time to less than 10 months by September 30, 2019; (ii) for the Department of Agriculture and the National Science Foundation, not later than 6 months after the date on which the applicable solicitation closes; or (iii) for any other Federal agency— (I) not later than 90 days after the date on which the applicable solicitation closes; or (II) if the Administrator authorizes an extension with respect to a solicitation, not later than 90 days after the date that would otherwise be applicable to the Federal agency under subclause (I); . 504. Continued GAO oversight of allocation compliance and accuracy in funding base calculations Section 5136(a) of the National Defense Authorization Act for Fiscal Year 2012 ( 15 U.S.C. 638 (1) in the matter preceding paragraph (1), by striking until the date that is 5 years after the date of enactment of this Act until the date on which the Comptroller General of the United States submits the report relating to fiscal year 2019 (2) in paragraph (1), by striking subparagraph (C) and inserting the following: (C) assess whether the change in the base funding for the Department of Defense as required by subparagraphs (J) and (K) of section 9(f)(1) of the Small Business Act ( 15 U.S.C. 638(f)(1) (i) improves transparency for determining whether the Department is complying with the allocation requirements; (ii) reduces the burden of calculating the allocations; and (iii) improves the compliance of the Department with the allocation requirements; and ; and (3) in paragraph (2) by striking under subparagraph (B) under subparagraphs (B) and (C) VI Participation by women and minorities 601. SBA coordination on increasing outreach for women and minority-owned businesses Section 9(b) of the Small Business Act ( 15 U.S.C. 638(b) (1) in paragraph (8), by striking and (2) in paragraph (9), by striking the period at the end and inserting ; and (3) by adding at the end the following: (10) to coordinate with participating agencies on efforts to increase outreach and awards under each of the SBIR and STTR programs to small business concerns owned and controlled by women and socially and economically disadvantaged small business concerns, as defined in section 8(a)(4). . 602. Federal agency outreach requirements for women and minority-owned businesses Section 9 of the Small Business Act ( 15 U.S.C. 638 (1) in subsection (g)— (A) in paragraph (11), by striking and (B) in paragraph (12), by striking the period at the end and inserting ; and (C) by adding at the end the following: (13) implement an outreach program to small business concerns for the purpose of enhancing its SBIR program, under which the Federal agency shall— (A) provide outreach to small business concerns owned and controlled by women and socially and economically disadvantaged small business concerns, as defined in section 8(a)(4); and (B) establish goals for outreach by the Federal agency to the small business concerns described in subparagraph (A). ; and (2) in subsection (o)(14), by striking SBIR program; SBIR program, under which the Federal agency shall— (A) provide outreach to small business concerns owned and controlled by women and socially and economically disadvantaged small business concerns, as defined in section 8(a)(4); and (B) establish goals for outreach by the Federal agency to the small business concerns described in subparagraph (A). . 603. STTR policy directive modification Section 9(p) of the Small Business Act ( 15 U.S.C. 638(p) (4) Additional 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 provide for enhanced outreach efforts to increase the participation of small business concerns owned and controlled by women and socially and economically disadvantaged small business concerns, as defined in section 8(a)(4), in technological innovation and in STTR programs. . 604. Interagency SBIR/STTR Policy Committee Section 5124 of the SBIR/STTR Reauthorization Act of 2011 ( Public Law 112–81 (1) by redesignating subsection (d) as subsection (e); and (2) by inserting after subsection (c) the following: (d) Meetings (1) In general The Interagency SBIR/STTR Policy Committee shall meet not less than twice per year to carry out the duties under subsection (c). (2) Outreach and technical assistance activities If the Interagency SBIR/STTR Policy Committee meets to discuss outreach and technical assistance activities to increase the participation of small business concerns that are underrepresented in the SBIR and STTR programs, the Committee shall invite to the meeting— (A) a representative of the Minority Business Development Agency; and (B) relevant stakeholders that work to advance the interests of— (i) small business concerns owned and controlled by women, as defined in section 3 of the Small Business Act ( 15 U.S.C. 632 (ii) socially and economically disadvantaged small business concerns, as defined in section 8(a)(4) of the Small Business Act ( 15 U.S.C. 637(a)(4) . 605. Diversity and STEM workforce development pilot program (a) Definitions In this section— (1) the term Administrator (2) the term covered STEM intern (A) whose course of study studied is focused on the STEM fields; and (B) who is a woman or a person from an underrepresented population in the STEM fields; (3) the term eligible entity (A) is receiving amounts under an award under the SBIR program or the STTR program of a Federal agency on the date on which the Federal agency awards a grant to the small business concern under subsection (b); and (B) provides internships for covered STEM interns; (4) the terms Federal agency SBIR STTR 15 U.S.C. 638(e) (5) the term institution of higher education 20 U.S.C. 1001(a) (6) the term person from an underrepresented population in the STEM fields (7) the term pilot program (8) the term recent graduate (9) the term small business concern 15 U.S.C. 632 (10) the term STEM fields (b) Pilot program for internships for women and people from underrepresented populations The Administrator shall establish a Diversity and STEM Workforce Development Pilot Program to encourage the business community to provide workforce development opportunities for covered STEM interns, under which a Federal agency participating in the SBIR program or STTR program may make a grant to 1 or more eligible entities for the costs of internships for covered STEM interns. (c) Amount and use of grants (1) Amount A grant under subsection (b)— (A) may not be in an amount of more than $15,000 per fiscal year; and (B) shall be in addition to the amount of the award to the recipient under the SBIR program or the STTR program. (2) Use Not less than 90 percent of the amount of a grant under subsection (b) shall be used by the eligible entity to provide stipends or other similar payments to interns. (d) Evaluation Not later than January 31 of the first calendar year after the third fiscal year during which the Administrator carries out the pilot program, the Administrator shall submit to Congress— (1) data on the results of the pilot program, such as the number and demographics of the covered STEM interns participating in an internship funded under the pilot program and the amount spent on such internships; and (2) an assessment of whether the pilot program helped the SBIR program and STTR program achieve the congressional objective of fostering and encouraging the participation of women and persons from underrepresented populations in the STEM fields. (e) Termination The pilot program shall terminate after the end of the fourth fiscal year during which the Administrator carries out the pilot program. (f) Authorization of appropriations There are authorized to be appropriated such sums as may be necessary to carry out the pilot program. VII Technical changes 701. Uniform reference to the Department of Health and Human Services Section 9 of the Small Business Act ( 15 U.S.C. 638 (1) in subsection (cc), by striking National Institutes of Health Department of Health and Human Services (2) in subsection (dd)(1)(A), by striking Director of the National Institutes of Health Secretary of Health and Human Services 702. Flexibility for Phase II award invitations Section 9(e)(4)(B) of the Small Business Act ( 15 U.S.C. 638(e)(4)(B) (1) by striking , which shall not include any invitation, pre-screening, or pre-selection process for eligibility for Phase II, (2) by inserting in which eligibility for an award shall not be based only on an invitation, pre-screening, or pre-selection process and in which awards May 24, 2016 Reported with an amendment

Summary: SBIR and STTR Reauthorization and Improvement Act of 2016 TITLE I--REAUTHORIZATION OF PROGRAMS (Sec. 101) This bill amends the Small Business Act to reauthorize and make permanent the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. TITLE II--ENHANCED SMALL BUSINESS ACCESS TO FEDERAL INNOVATION INVESTMENTS (Sec. 201) The bill specifies budget amounts for the Department of Defense (DOD) (for extramural expenditures and those for research, development, test, and evaluation) and other federal agencies to obligate for expenditure with small business concerns under the SBIR and STTR programs. (Sec. 202) The Small Business Administration (SBA) shall modify certain policy directives to eliminate automatic annual inflation adjustments to awards under Phases I and II of the SBIR program. (Phase I is a six-month exploration of the technical merit or feasibility of an idea or technology. Phase II, which may be for up to two years, is research, development, and evaluation of the potential of Phase I ideas or technologies for commercialization.) The bill expresses the sense of Congress that for FY2019, and every third fiscal year following, Congress should evaluate whether the maximum award sizes under the SBIR and STTR programs should be adjusted and, if so, take appropriate action to require such adjustments to be made under specified SBIR policy directives. A federal agency head shall ensure that any sequential Phase II award is made in accordance with specified limitations on award sizes. (A sequential Phase II award is an additional Phase II award for research and development of an idea or technology that evaluates the potential for commercialization.) A small business concern that receives a sequential Phase II SBIR or Phase II STTR award for a project from a federal agency shall be eligible to receive an additional sequential Phase II award that continues work on that project from another federal agency. TITLE III--COMMERCIALIZATION IMPROVEMENTS (Sec. 301)The bill makes permanent the Commercialization Development Awards pilot program under which the SBA makes awards: for technology development, testing, evaluation, and commercialization assistance for SBIR and STTR Phase II technologies; or to support the progress of research, research and development, and commercialization conducted under the SBIR or STTR programs to Phase III (in which a small business pursues, without SBA funding, commercialization objectives resulting from the Phase I/II activities). (Sec. 302) The national small business goal for federal agency research and development programs shall be at least 10% for FY2018 and ensuing fiscal years. (Sec. 303) Annual reports to Congress on the SBIR and STTR programs shall include information regarding awards under the Rapid Innovation Program under the Ike Skelton National Defense Authorization Act for Fiscal Year 2011. (Sec. 304) An SBIR or STTR award may cover the indirect cost of seeking protection for intellectual property created through work performed under it. No federal agency may inhibit directly or indirectly the recovery of patent costs by an otherwise eligible small business concern performing under an SBIR or STTR award, including: costs for searching the art necessary to make invention disclosures; other costs connected with the filing and prosecution of a U.S. patent application where title or royalty-free license is to be conveyed to the federal government; and general counseling services relating to patent matters. These patent costs shall be allowable for technology developed under: a Phase I award, as indirect costs of up to $5,000; a Phase II award, as indirect costs of up to $15,000; and a Phase III award in which the federal government has specified government purpose rights. (Sec. 305) The Government Accountability Office (GAO) shall audit annually federal government compliance with SBIR and STTR goals and incentives. (Sec. 306) Federal agencies and 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. 307) Each federal agency required to conduct an SBIR or an STTR program may enter into an agreement with one (as in current law) or more vendors to give small business concerns engaged in SBIR or STTR projects technical assistance (as in current law) and business assistance services, such as assistance with product sales, intellectual property protections, market research, market validation, and development of regulatory and manufacturing plans, as well as intellectual property protections. A small business concern as well as a federal agency may, by contract or otherwise, select one or more vendors to assist the small business concern in meeting program goals. The amount that a federal agency may give a recipient of a Phase I SBIR or STTR award through a vendor, or that the agency may authorize for a recipient in order to purchase allowable services, shall change from up to $5,000 per year to up to $6,500 per project. The counterpart amounts for the recipient of a Phase II SBIR or STTR award shall change from up to $5,000 per year to up to $35,000 per project. The amount for purchase of services may be included as part of the recipient's award or be in addition to the amount of the recipient's award. Business-related services aimed at improving the commercialization success of a small business concern may be obtained from an entity, such as a public or private organization, a state agency, or another state-established or -funded entity, that facilitates or accelerates the commercialization of technologies or assists in the creation and growth of private enterprises that are commercializing technology. The SBA shall establish a fiscal year limit on the amount of technical and business assistance services that may be received or purchased by small business concerns with respect to multiple Phase II SBIR or STTR awards. TITLE IV--PROGRAM DIVERSIFICATION INITIATIVES (Sec. 401) The SBA shall allow each federal agency required to conduct an SBIR program to use certain funds for improvements that increase commonality across data systems, reduce redundancy, and improve data oversight and accuracy. The SBA shall establish a Regional SBIR State Collaborative Initiative Pilot Program under which it shall make awards to regional collaboratives to address the needs of small business concerns in order to: be more competitive in the proposal and selection process for SBIR and STTR awards, and increase technology transfer and commercialization. The SBA shall award each eligible state in a regional collaborative up to $300,000 to carry out collaborative activities. The Pilot Program shall terminate at the end of FY2021. (Sec. 402) The bill reauthorizes the Federal and State Technology (FAST) Partnership Program through FY2021. TITLE V--OVERSIGHT AND SIMPLIFICATION INITIATIVES (Sec. 501) The bill establishes an SBIR and STTR Interagency Policy Committee to: determine how to collect data on achievements by small business concerns in each phase of the programs; establish a uniform baseline for metrics that support improving the solicitation, contracting, funding, and execution of program management; normalize formatting and database usage across participating federal agencies; and determine the feasibility of developing a common system across all participating federal agencies and related paperwork requirements. (Sec. 502) For FY2018-FY2019 any federal agency that has not implemented specified SBIR and STTR requirements must continue to pay the SBA specified funds for the Regional SBIR State Collaborative Initiative Pilot Program and the FAST Partnership Program, and to support the SBA Office of the Administration that administers those programs; but may not use any additional amounts until a certain time after it complies fully with those requirements. (Sec. 503) The Department of Health and Human Services (HHS), the Department of Agriculture, and the National Science Foundation shall make final decisions on each proposal submitted under its SBIR and STTR programs by specified deadlines. (Sec. 504) The National Defense Authorization Act for Fiscal Year 2012 is amended to extend until the GAO submits its FY2019 report the GAO duty to conduct fiscal and management audits of the SBIR and STTR programs. The GAO shall assess whether the change in the base funding for DOD under Sec. 201 of this bill: improves transparency for determining whether DOD is complying with SBIR AND STTR allocation requirements, reduces the burden of calculating the allocations, and improves DOD compliance with those allocation requirements. TITLE VI--PARTICIPATION BY WOMEN AND MINORITIES (Sec. 601) The SBA shall coordinate with participating agencies on efforts to increase outreach and awards under the SBIR and STTR programs to small business concerns owned and controlled by women and socially and economically disadvantaged small business concerns. (Sec. 602) Each federal agency required to establish an SBIR program shall implement an SBIR outreach program to all such concerns. (Sec. 603) The SBA shall modify its STTR policy directive to emphasize enhanced outreach efforts to increase the participation of such concerns in technological innovation and in STTR programs. (Sec. 604) The SBIR/STTR Reauthorization Act of 2011 is amended to require the Interagency SBIR/STTR Policy Committee to meet at least twice a year. If it meets to discuss outreach and technical assistance activities to increase the participation of small business concerns underrepresented in the SBIR and STTR programs, it shall invite a representative of the Minority Business Development Agency and relevant stakeholders working to advance the interests of small business concerns owned and controlled by women and by socially and economically disadvantaged small business concerns. (Sec. 605) The SBA shall establish a four-year Diversity and STEM Workforce Development Pilot Program to encourage the business community to create workforce development opportunities for science, technology, engineering, and math (STEM) interns, under which a federal agency participating in the SBIR or the STTR program may make a grant of up to $15,000 per year to one or more eligible entities for the costs of internships for covered STEM interns. TITLE VII--TECHNICAL CHANGES (Sec. 701) HHS generally (currently only the National Institutes of Health) may: grant a small business concern a Phase II SBIR award for a project without regard to whether the concern received a Phase I award for the project, if certain requirements are met; and award competitively up to 25% of the funds allocated for the SBIR program to small business concerns owned in majority part by multiple venture capital operating companies, hedge funds, or private equity firms. (Sec. 702) Eligibility for a Phase II SBIR award may be based, but not based only, on an invitation, pre-screening, or pre-selection process.