Title: Accelerating Defense Innovation Act of 2019
Policy area: Commerce

Summary:
Accelerating Defense Innovation Act of 2019
This bill establishes a pilot program within the Department of Defense (DOD) to grant money to certain small businesses and modifies provisions related to DOD funding of small businesses through Small Business Administration programs.
Specifically, the bill creates the Domestic Investment Pilot Program, which allows DOD and service acquisition executives for each military department to make a Small Business Innovation Research (SBIR) program award to small businesses that are majority-owned by multiple domestic venture investors. However, no more than 15% of DOD SBIR funds may be awarded to such small businesses. In addition, the bill doubles funding for the Defense Research and Development Rapid Innovation Program, which is a competitive, merit-based program designed to accelerate the deployment of technologies developed through SBIR projects.
The bill also allows DOD to award Small Business Technology Transfer (STTR) program funds to accelerate the creation of small businesses and the commercialization of research innovations. Further, the bill authorizes discretionary technical and business assistance through the SBIR and STTR programs for the purpose of aiding small businesses with cybersecurity decision-making, problem-solving, and development and commercialization of new products and processes.
Lastly, DOD, in consultation with the military departments, must establish at least three joint reserve detachments at locations of the Defense Innovation Unit to (1) support engagement and collaboration with commercial innovation hubs, and (2) accelerate the transition and adoption of commercial technologies for national security purposes.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3014 Introduced in House (IH)]

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116th CONGRESS
  1st Session
                                H. R. 3014

 To amend title 10, United States Code, and the Small Business Act to 
   improve innovation in defense procurement, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 23, 2019

Mr. Thornberry introduced the following bill; which was referred to the 
Committee on Armed Services, and in addition to the Committees on Small 
   Business, and Science, Space, and Technology, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
  of such provisions as fall within the jurisdiction of the committee 
                               concerned

_______________________________________________________________________

                                 A BILL


 
 To amend title 10, United States Code, and the Small Business Act to 
   improve innovation in defense procurement, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Accelerating 
Defense Innovation Act of 2019''.
    (b) Table of Contents.--

Sec. 1. Short title and table of contents.
Sec. 2. Alignment of the Small Business Innovation Research Program and 
                            Small Business Technology Transfer Program 
                            of the Department of Defense with the 
                            National Defense Science and Technology 
                            Strategy.
Sec. 3. Pilot program for domestic investment under the SBIR program.
Sec. 4. Cybersecurity technical and business assistance for SBIR and 
                            STTR programs.
Sec. 5. Phase 0 proof of concept partnership program for the Department 
                            of Defense.
Sec. 6. Modification to the Defense Research and Development Rapid 
                            Innovation Program.
Sec. 7. Establishment of joint reserve detachments at Defense 
                            Innovation Unit.

SEC. 2. ALIGNMENT OF THE SMALL BUSINESS INNOVATION RESEARCH PROGRAM AND 
              SMALL BUSINESS TECHNOLOGY TRANSFER PROGRAM OF THE 
              DEPARTMENT OF DEFENSE WITH THE NATIONAL DEFENSE SCIENCE 
              AND TECHNOLOGY STRATEGY.

    (a) In General.--The Secretary of Defense and Secretaries of the 
military departments shall, to the extent possible, align the research 
topics selected for activities conducted under the Small Business 
Innovation Research Program and Small Business Technology Transfer 
Program (as defined under section 9 of the Small Business Act (15 
U.S.C. 638)) with the National Defense Science and Technology Strategy 
established under section 218 of the John S. McCain National Defense 
Authorization Act for Fiscal Year 2019 (Public Law 115-232; 132 Stat. 
1679).
    (b) Use of National Defense Science and Technology Strategy To 
Determine Research Topics.--Section 9 of the Small Business Act (15 
U.S.C. 638) is amended--
            (1) in subsection (g)(3)(B), by striking ``, in the 1992 
        report'' and all that follows through ``that authority'' and 
        inserting ``in the National Defense Science and Technology 
        Strategy established under section 218 of the John S. McCain 
        National Defense Authorization Act for Fiscal Year 2019 (Public 
        Law 115-232; 132 Stat. 1679)''; and
            (2) in subsection (o)(3)(B), by striking ``, in accordance 
        with section 2522 of title 10, United States Code'' and 
        inserting ``in the National Defense Science and Technology 
        Strategy established under section 218 of the John S. McCain 
        National Defense Authorization Act for Fiscal Year 2019 (Public 
        Law 115-232; 132 Stat. 1679)''.

SEC. 3. PILOT PROGRAM FOR DOMESTIC INVESTMENT UNDER THE SBIR PROGRAM.

    (a) Sense of Congress.--It is the sense of Congress that the 
Administrator of the Small Business Administration should promulgate 
regulations to carry out the requirements under section 9(dd) of the 
Small Business Act (15 U.S.C. 638(dd)) that--
            (1) permit small business concerns that are majority-owned 
        by multiple venture capital operating companies, hedge funds, 
        or private equity firms to participate in the SBIR program in 
        accordance with such section;
            (2) provide specific information regarding eligibility, 
        participation, and affiliation rules to such small business 
        concerns; and
            (3) preserve and maintain the integrity of the SBIR program 
        as a program for small business concerns in the United States 
        by prohibiting large entities or foreign-owned entities from 
        participation in the SBIR program.
    (b) Domestic Investment Pilot Program.--
            (1) In general.--Not later than 1 year after the date of 
        the enactment of this Act and notwithstanding the requirements 
        of section 9(dd) of the Small Business Act (15 U.S.C. 638(dd)), 
        the Secretary of Defense shall create and administer a program 
        to be known as the ``Domestic Investment Pilot Program'' under 
        which the Secretary and the service acquisition executive for 
        each military department may make a SBIR award to a small 
        business concern that is majority-owned by multiple venture 
        capital operating companies, hedge funds, or private equity 
        firms without providing the written determination described 
        under paragraph (2) of such section 9(dd).
            (2) Limitation.--The Secretary of Defense may award not 
        more than 15 percent of the funds allocated for the SBIR 
        program of the Department of Defense under section 9(f) of the 
        Small Business Act (15 U.S.C. 638(f)) to small business 
        concerns that are owned in majority part by multiple venture 
        capital operating companies, hedge funds, or private equity 
        firms through competitive, merit-based procedures that are open 
        to all eligible small business concerns.
            (3) Evaluation criteria.--In carrying out the Domestic 
        Investment Pilot Program, the Secretary of Defense may not use 
        investment of venture capital or investment from hedge funds or 
        private equity firms as a criterion for the award of contracts 
        under the SBIR program or STTR program.
            (4) Annual reporting.--The Secretary of Defense shall 
        include as part of each annual report required under section 
        9(b)(7) of the Small Business Act (15 U.S.C. 638(9)(b)(7))--
                    (A) information on the implementation of the 
                Domestic Investment Pilot Program;
                    (B) the number of proposals received from small 
                business concerns that are majority-owned by multiple 
                venture capital operating companies, hedge funds, or 
                private equity firms for the Domestic Investment Pilot 
                Program; and
                    (C) the number of awards made to such small 
                business concerns.
            (5) Termination.--The Domestic Investment Pilot Program 
        established under this subsection shall terminate on September 
        30, 2022.
    (c) Definitions.--In this section:
            (1) SBIR.--The term ``SBIR'' has the meaning given in 
        section 9(e) of the Small Business Act (15 U.S.C. 638(e)).
            (2) Small business act definitions.--The terms ``small 
        business concern'', ``venture capital operating company'', 
        ``hedge fund'', and ``private equity firm'' have the meanings 
        given those terms, respectively, in section 3 of the Small 
        Business Act (15 U.S.C. 632).

SEC. 4. CYBERSECURITY TECHNICAL AND BUSINESS ASSISTANCE FOR SBIR AND 
              STTR PROGRAMS.

    Section 9(q)(1) of the Small Business Act (15 U.S.C. 638(q)(1)) is 
amended--
            (1) in the matter preceding subparagraph (A), by inserting 
        ``cybersecurity,'' after ``product sales,''; and
            (2) in subparagraph (A), by striking ``decisions'' and 
        inserting ``decisions, including decisions relating to 
        cybersecurity practices''.

SEC. 5. PHASE 0 PROOF OF CONCEPT PARTNERSHIP PROGRAM FOR THE DEPARTMENT 
              OF DEFENSE.

    Section 9(jj) of the Small Business Act (15 U.S.C. 638) is 
amended--
            (1) in paragraph (1), by striking ``The Director of the 
        National Institutes of Health'' and inserting ``A covered 
        agency head'';
            (2) by striking ``The Director'' each place it appears and 
        inserting ``A covered agency head'';
            (3) by striking ``the Director'' each place it appears and 
        inserting ``a covered agency head'';
            (4) in paragraph (2)--
                    (A) by amending subparagraph (A) to read as 
                follows:
                    ``(A) the term `covered agency head' means--
                            ``(i) with respect to the STTR program of 
                        the National Institutes of Health, the Director 
                        of the National Institutes of Health; or
                            ``(ii) with respect to the STTR program of 
                        the Department of Defense, the Secretary of 
                        Defense;''; and
                    (B) in subparagraph (C), by striking ``in the 
                National Institutes of Health's STTR program'' and 
                inserting ``in either the STTR program of the 
                Department of Defense or the STTR program of the 
                National Institutes of Health''; and
            (5) in paragraph (4)(A), by inserting ``participating in 
        the STTR program administered by such agency head'' after ``a 
        qualifying institution''.

SEC. 6. MODIFICATION TO THE DEFENSE RESEARCH AND DEVELOPMENT RAPID 
              INNOVATION PROGRAM.

    (a) Increase to Funding.--Section 2359a(b)(3) of title 10, United 
States Code, is amended by striking ``$3,000,000'' and inserting 
``$6,000,000''.
    (b) Report.--Not later than 180 days after the date of the 
enactment of this Act, the Secretary of Defense shall submit to the 
congressional defense committees a report on the program established 
under section 2359a(b)(3) of title 10, United States Code (commonly 
known as the ``Defense Research and Development Rapid Innovation 
Program''), which shall include--
            (1) with respect to the two fiscal years preceding the 
        submission of the report--
                    (A) a description of the total number of proposals 
                funded under the program;
                    (B) the percent of funds made available under the 
                program for Small Business Innovation Research Program 
                projects; and
                    (C) a list of Small Business Innovation Research 
                Program projects that received funding under the 
                program that were included in major defense acquisition 
                programs (as defined in section 2430 of title 10, 
                United States Code) and other defense acquisition 
                programs that meet critical national security needs; 
                and
            (2) an assessment on the effectiveness of the program in 
        stimulating innovation technologies, reducing acquisition or 
        life-cycle costs, addressing technical risk, and improving the 
        timeliness and thoroughness of test and evaluation outcomes.

SEC. 7. ESTABLISHMENT OF JOINT RESERVE DETACHMENTS AT DEFENSE 
              INNOVATION UNIT.

    (a) Establishment.--The Secretary of Defense, in consultation with 
the Secretaries of the military departments, shall establish not fewer 
than three joint reserve detachments (referred to in this section as 
``Detachments'') at locations of the Defense Innovation Unit--
            (1) to support engagement and collaboration with commercial 
        innovation hubs; and
            (2) to accelerate the transition and adoption of commercial 
        technologies for national security purposes.
    (b) Composition.--Each Detachment shall be composed of members of 
the reserve components who possess relevant private sector experience 
in the fields of business, acquisition, intelligence, engineering, 
technology transfer, science, mathematics, contracting, procurement, 
logistics, cyberspace security, or such other fields as are determined 
to be relevant by the Under Secretary of Defense for Research and 
Engineering.
    (c) Responsibilities.--The Detachments shall have the following 
responsibilities:
            (1) Each Detachment shall provide the Department of Defense 
        with expertise, analysis, alternatives for innovation, and 
        opportunities for greater engagement and collaboration between 
        the defense innovation ecosystem and commercial industry.
            (2) Each Detachment shall, on an ongoing basis--
                    (A) recruit, retain, and employ members of the 
                reserve components who possess relevant private sector 
                experience, as described in subsection (b);
                    (B) partner with the military services, the 
                combatant commands, and other Department of Defense 
                organizations to seek and rapidly prototype advanced 
                commercial solutions while lowing the barrier to entry 
                to serve defense requirements;
                    (C) increase awareness of--
                            (i) the technology portfolios of the 
                        Defense Innovation Unit; and
                            (ii) the technology requirements of the 
                        Department of Defense as identified in the 
                        National Defense Science and Technology 
                        Strategy developed under section 218 of the 
                        John S. McCain National Defense Authorization 
                        Act for Fiscal Year 2019 (Public Law 115-232; 
                        132 Stat. 1679);
                    (D) capitalize on the growing investment in 
                research and development made by the commercial 
                industry in assessing and maturing dual-use 
                technologies; and
                    (E) carry out such other activities as may be 
                directed by the Under Secretary of Defense for Research 
                and Engineering.
    (d) Deadline for Establishment of Detachments.--The Secretary of 
Defense shall ensure that--
            (1) at least one Detachment is established on or before 
        October 1, 2020; and
            (2) all three Detachments required under subsection (a) are 
        established on or before October 1, 2022.
    (e) Implementation Report.--
            (1) In general.--Not later than 120 days after the date of 
        the enactment of this Act, the Under Secretary of Defense for 
        Research and Engineering shall submit to the congressional 
        defense committees a report that includes--
                    (A) an organizational plan for the Detachments;
                    (B) the estimated costs of establishing the 
                Detachments; and
                    (C) a timeline specifying when each Detachment will 
                attain initial operational capability and full 
                operational capability, respectively.
            (2) Consultation.--In preparing the report required under 
        paragraph (1), the Under Secretary of Defense for Research and 
        Engineering shall consult with the Director of the Defense 
        Innovation Unit and the head of each military service.
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