istrator shall issue rules to carry out this sub-
section.’’. 
(b) TECHNICAL AND CONFORMING AMENDMENTS.— 
(1) IN GENERAL.—Section 9 of the Small Busi-
ness 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 avail-
able 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), respec-
tively. 
(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 Ad-
ministrator under subsection (ll)(2) of section 9 of 
the Small Business Act, as added by subsection (a). 
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(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 para-
graph (1) of this section, is amended— 
(A) in subsection (f)(2), by striking ‘‘shall 
not make available for the purpose’’ and insert-
ing the following: ‘‘shall not— 
‘‘(A) use any of its SBIR budget estab-
lished pursuant to paragraph (1) for the pur-
pose of funding administrative costs of the pro-
gram, 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), respec-
tively; and 
(ii) by inserting after paragraph (3) 
the following: 
‘‘(4) FUNDING.— 
‘‘(A) IN GENERAL.—The Secretary of De-
fense and each Secretary of a military depart-
ment may use not more than an amount equal 
to 1 percent of the funds available to the De-
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partment of Defense or the military department 
pursuant to the Small Business Innovation Re-
search Program for payment of expenses in-
curred to administer the Commercialization 
Pilot Program under this subsection. 
‘‘(B) LIMITATIONS.—The funds described 
in subparagraph (A)— 
‘‘(i) shall not be subject to the limita-
tions 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 require-
ments 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). 
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SEC. 312. REDUCING VULNERABILITY OF SBIR AND STTR 
PROGRAMS TO FRAUD, WASTE, AND ABUSE. 
(a) FRAUD, WASTE, AND ABUSE PREVENTION.— 
(1) GUIDELINES
FOR
FRAUD, WASTE, AND 
ABUSE PREVENTION.— 
(A) AMENDMENTS REQUIRED.—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. 
(B) CONTENT
OF
AMENDMENTS.—The 
amendments required under subparagraph (A) 
shall include— 
(i) definitions or descriptions of fraud, 
waste, and abuse; 
(ii) a requirement that the Inspectors 
General of each Federal agency that par-
ticipates in the SBIR program or the 
STTR program cooperate to— 
(I) establish fraud detection indi-
cators; 
(II) review regulations and oper-
ating procedures of the Federal agen-
cies; 
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(III) 
coordinate 
information 
sharing between the Federal agencies; 
and 
(IV) improve the education and 
training of, and outreach to— 
(aa) administrators of the 
SBIR program and the STTR 
program of each Federal agency; 
(bb) applicants to the SBIR 
program or the STTR program; 
and 
(cc) recipients of awards 
under the SBIR program or the 
STTR program; 
(iii) guidelines for the monitoring and 
oversight of applicants to and recipients of 
awards under the SBIR program or the 
STTR program; and 
(iv) a requirement that each Federal 
agency that participates in the SBIR pro-
gram or STTR program include the tele-
phone number of the hotline established 
under paragraph (2)— 
(I) on the Web site of the Fed-
eral agency; and 
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(II) in any solicitation or notice 
of funding opportunity issued by the 
Federal agency for the SBIR program 
or the STTR program. 
(2) FRAUD, WASTE, AND ABUSE PREVENTION 
HOTLINE.— 
(A) HOTLINE ESTABLISHED.—The Admin-
istrator shall establish a telephone hotline that 
allows individuals to report fraud, waste, and 
abuse in the SBIR program or STTR program. 
(B) 
PUBLICATION.—The 
Administrator 
shall include the telephone number for the hot-
line established under subparagraph (A) on the 
Web site of the Administration. 
(b) STUDY AND REPORT.—Not later than 1 year 
after the date of enactment of this Act, and every 3 years 
thereafter, 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); 
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Federal law relating to fraud, conflicts of inter-
est, bribery, gratuity, or other misconduct; 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 Representa-
tives, and the head of each Federal agency that par-
ticipates 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 ‘‘SIM-
PLIFIED REPORTING REQUIREMENTS’’ and inserting 
‘‘REDUCING PAPERWORK
AND COMPLIANCE BUR-
DEN’’; 
(2) by striking ‘‘The Administrator’’ and insert-
ing the following: 
‘‘(1) STANDARDIZATION
OF
REPORTING
RE-
QUIREMENTS.—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 pe-
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riod of public comment, the Administrator shall 
issue regulations or guidelines, taking into consider-
ation 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 require-
ments) to reduce the paperwork and regulatory com-
pliance burden on small business concerns applying 
to and participating in the SBIR program or STTR 
program.’’. 
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 pro-
mulgate 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 
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this Act, the Administrator shall publish the amended 
SBIR Policy Directive and the amended STTR Policy Di-
rective 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: 
‘‘(mm) ANNUAL REPORT ON SBIR AND STTR PRO-
GRAM 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 pro-
gram 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 eco-
nomic impact of the programs. 
‘‘(2) EVALUATION.—The head of each Federal 
agency described in paragraph (1) shall conduct an 
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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 Con-
gress 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 
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‘‘(ii) the Committee on Small Busi-
ness and the Committee on Science, Space, 
and Technology of the House of Represent-
atives.’’. 
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: 
‘‘(nn) COMPETITIVE SELECTION PROCEDURES FOR 
SBIR AND STTR PROGRAMS.—All funds awarded, appro-
priated, or otherwise made available in accordance with 
subsection (f) or (n) must be awarded pursuant to com-
petitive 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 Adminis-
trator 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 sec-
tion 121.103(a) of title 13, Code of Federal Regulations, 
as in effect on January 1, 2011. 
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