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(A) the reason why it is not possible to provide the 
certification under paragraph (1) for the ground monitoring 
stations covered by such waiver; 
(B) an assessment of the impact of the exercise of 
authority under paragraph (2) with respect to such ground 
monitoring stations on the national security of the United 
States; 
(C) a description of the means to be used to mitigate 
any such impact to the United States for the duration 
that such ground monitoring stations are operated in the 
territory of the United States; and 
(D) any other information in connection with the 
waiver that the Secretary of Defense and the Director 
of National Intelligence, in consultation with the Secretary 
of State, consider appropriate. 
(4) NOTICE.—Not later than 30 days before the exercise 
of the authority to waive under paragraph (2) the certification 
requirement under paragraph (1) for a ground monitoring sta-
tion, the Secretary of Defense and the Director of National 
Intelligence shall jointly provide to the appropriate congres-
sional committees notice of the exercise of such authority and 
the report required under paragraph (3) with respect to such 
ground monitoring station. 
(5) APPROPRIATE CONGRESSIONAL COMMITTEES DEFINED.— 
In this subsection, the term ‘‘appropriate congressional commit-
tees’’ means— 
(A) the Committee on Armed Services, the Committee 
on Foreign Relations, and the Select Committee on Intel-
ligence of the Senate; and 
(B) the Committee on Armed Services, the committee 
on Foreign Affairs, and the Permanent Select Committee 
on Intelligence of the House of Representatives. 
(6) SUNSET.—Effective on the date that is five years after 
the date of the enactment of this Act, paragraphs (1) through 
(5) are repealed. 
SEC. 1603. PROOF OF CONCEPT COMMERCIALIZATION PILOT PRO-
GRAM. 
(a) PILOT PROGRAM.—The Secretary of Defense, acting through 
the Assistant Secretary of Defense for Research and Engineering, 
may establish and implement a pilot program, to be known as 
the ‘‘Proof of Concept Commercialization Pilot Program’’, in accord-
ance with this section. 
(b) PURPOSE.—The purpose of the pilot program is to accelerate 
the commercialization of basic research innovations from qualifying 
institutions. 
(c) AWARDS.— 
(1) IN GENERAL.—Under the pilot program, the Secretary 
shall make financial awards to qualifying institutions in accord-
ance with this subsection. 
(2) COMPETITIVE, MERIT-BASED PROCESS.—An award under 
the pilot program shall be made using a competitive, merit- 
based process. 
(3) ELIGIBILITY.—A qualifying institution shall be eligible 
for an award under the pilot program if the institution agrees 
to—
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(A) use funds from the award for the uses specified 
in paragraph (5); and 
(B) oversee the use of the funds through— 
(i) a rigorous, diverse review board comprised of 
experts in translational and proof of concept research, 
including industry, start-up, venture capital, technical, 
financial, and business experts and university tech-
nology transfer officials; 
(ii) technology validation milestones focused on 
market feasibility; 
(iii) simple reporting on program progress; and 
(iv) a process to reallocate funding from poor per-
forming projects to those with more potential. 
(4) CRITERIA.—An award may be made under the pilot 
program to a qualifying institution in accordance with the 
following criteria: 
(A) The extent to which a qualifying institution— 
(i) has an established and proven technology 
transfer or commercialization office and has a plan 
for engaging that office in the program’s implementa-
tion or has outlined an innovative approach to tech-
nology transfer that has the potential to increase or 
accelerate technology transfer outcomes and can be 
adopted by other qualifying institutions; 
(ii) can assemble a project management board com-
prised of industry, start-up, venture capital, technical, 
financial, and business experts; 
(iii) has an intellectual property rights strategy 
or office; and 
(iv) demonstrates a plan for sustainability beyond 
the duration of the funding from the award. 
(B) Such other criteria as the Secretary determines 
necessary. 
(5) USE OF AWARD.— 
(A) IN
GENERAL.—Subject to subparagraph (B), the 
funds from an award may be used to evaluate the commer-
cial potential of existing discoveries, including activities 
that contribute to determining a project’s commercialization 
path, including technical validations, market research, 
clarifying intellectual property rights, and investigating 
commercial and business opportunities. 
(B) LIMITATIONS.— 
(i) The amount of an award may not exceed 
$500,000 a year. 
(ii) Funds from an award may not be used for 
basic research, or to fund the acquisition of research 
equipment or supplies unrelated to commercialization 
activities. 
(d) REPORT.—Not later than one year after the establishment 
of the pilot program, the Secretary shall submit to the congressional 
defense committees and to the Committee on Science, Space, and 
Technology of the House of Representatives and the Committee 
on Commerce, Science, and Transportation of the Senate a report 
evaluating the effectiveness of the activities of the pilot program. 
The report shall include— 
(1) a detailed description of the pilot program, including 
incentives and activities undertaken by review board experts;
H. R. 3304—275 
(2) an accounting of the funds used in the pilot program; 
(3) a detailed description of the institutional selection 
process; 
(4) a detailed compilation of results achieved by the pilot 
program; and 
(5) an analysis of the program’s effectiveness, with data 
supporting the analysis. 
(e) QUALIFYING INSTITUTION DEFINED.—In this section, the term 
‘‘qualifying institution’’ means a nonprofit institution, as defined 
in section 4(3) of the Stevenson-Wydler Technology Innovation Act 
of 1980 (15 U.S.C. 3703(3)), or a Federal laboratory, as defined 
in section 4(4) of the Stevenson-Wydler Technology Innovation Act 
of 1980 (15 U.S.C. 3703(4)). 
(f) LIMITATION.—Not more than $5,000,000 may be obligated 
or expended to conduct the pilot program under this section. 
(g) TERMINATION.—The pilot program conducted under this sec-
tion shall terminate on September 30, 2018. 
Subtitle B—Matters Relating to Small 
Business Concerns 
SEC. 1611. ADVANCING SMALL BUSINESS GROWTH. 
(a) ADVANCING SMALL BUSINESS GROWTH.— 
(1) IN GENERAL.—Chapter 142 of title 10, United States 
Code, is amended— 
(A) by redesignating section 2419 as section 2420; and 
(B) by inserting after section 2418 the following new 
section 2419: 
‘‘§ 2419. Advancing small business growth 
‘‘(a) CONTRACT CLAUSE REQUIRED.—(1) The Under Secretary 
of Defense for Acquisition, Technology, and Logistics shall require 
the clause described in paragraph (2) to be included in each covered 
contract awarded by the Department of Defense. 
‘‘(2) The clause described in this paragraph is a clause that— 
‘‘(A) requires the contractor to acknowledge that acceptance 
of the contract may cause the business to exceed the applicable 
small business size standards (established pursuant to section 
3(a) of the Small Business Act) for the industry concerned 
and that the contractor may no longer qualify as a small 
business concern for that industry; and 
‘‘(B) encourages the contractor to develop capabilities and 
characteristics typically desired in contractors that are competi-
tive as an other-than-small business in that industry. 
‘‘(b) AVAILABILITY OF ASSISTANCE.—Covered small businesses 
may be provided assistance as part of any procurement technical 
assistance furnished pursuant to this chapter. 
‘‘(c) DEFINITIONS.—In this section: 
‘‘(1) The term ‘covered contract’ means a contract— 
‘‘(A) awarded to a qualified small business concern 
as defined pursuant to section 3(a) of the Small Business 
Act; and 
‘‘(B) with an estimated annual value— 
‘‘(i) that will exceed the applicable receipt-based 
small business size standard; or
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‘‘(ii) if the contract is in an industry with an 
employee-based 
size 
standard, 
that 
will 
exceed 
$70,000,000. 
‘‘(2) The term ‘covered small business’ means a qualified 
small business concern as defined pursuant to section 3(a) 
of the Small Business Act that has entered into a contract 
with the Department of Defense that includes a contract clause 
described in subsection (a)(2).’’. 
(2) CLERICAL AMENDMENT.—The table of sections at the 
beginning of such chapter is amended by striking the item 
relating to section 2419 and inserting the following: 
‘‘2419. Advancing small business growth. 
‘‘2420. Regulations.’’. 
(b) EXCEPTION TO LIMITATION ON FUNDING.—Section 2414 of 
such title is amended— 
(1) in subsection (a), by striking ‘‘The value’’ and inserting 
‘‘Except as provided in subsection (c), the value’’; and 
(2) by adding at the end the following new subsection 
(c): 
‘‘(c) EXCEPTION.—The value of the assistance provided in accord-
ance with section 2419(b) of this title is not subject to the limitations 
in subsection (a).’’. 
(c) REVISIONS TO COOPERATIVE AGREEMENTS.— 
(1) FULL FUNDING ALLOWED FOR CERTAIN ASSISTANCE.— 
Section 2413(b) of such title is amended— 
(A) by striking ‘‘except that in the case’’ and inserting: 
‘‘except that— 
‘‘(1) in the case’’; 
(B) by striking the period at the end and inserting 
‘‘; and’’; and 
(C) by adding at the end the following new paragraph: 
‘‘(2) in the case of a program sponsored by such an entity 
that provides assistance for covered small businesses pursuant 
to section 2419(b) of this title, the Secretary may agree to 
furnish the full cost of such assistance.’’. 
(2) ADDITIONAL
CONSIDERATIONS.—Section 2413 of such 
title is further amended by adding at the end the following 
new subsection: 
‘‘(e) In determining the level of funding to provide under an 
agreement under subsection (b), the Secretary shall consider the 
forecast by the eligible entity of demand for procurement technical 
assistance, and, in the case of an established program under this 
chapter, the outlays and receipts of such program during prior 
years of operation.’’. 
(3) CONFORMING AMENDMENT.—Section 2413(d) of such title 
is amended by striking ‘‘and in determining the level of funding 
to provide under an agreement under subsection (b),’’. 
(d) REPORT REQUIRED.—Not later than March 15, of 2015, 
2016, and 2017, the Secretary of Defense shall submit to the 
congressional defense committees a report on the implementation 
of the amendments made by this section, along with any rec-
ommendations for improving the Procurement Technical Assistance 
Cooperative Agreement Program.