I 118th CONGRESS 2d Session H. R. 10407 IN THE HOUSE OF REPRESENTATIVES December 12, 2024 Ms. Velázquez introduced the following bill; which was referred to the Committee on Small Business , and in addition to the Committees on Science, Space, and Technology , and Armed Services , 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 the Small Business Act to reauthorize and modify the Small Business Innovation Research and Small Business Technology Transfer Research programs, and for other purposes.

1. Short title This Act may be cited as the SBIR/STTR Reauthorization Act of 2024 . 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. Sense of Congress. Sec. 102. Extension of SBIR and STTR authority. Sec. 103. Extension of FAST Program. Title II—Diversification Initiatives Sec. 201. SBIR and STTR fellowships. Sec. 202. Application assistance to broaden participation. Sec. 203. Technical and business assistance improvements. Sec. 204. Improvements to website relating to the SBIR program or STTR program. Title III—Commercialization Improvements Sec. 301. Phase III award education. Sec. 302. Report on DoD denials of Phase III. Title IV—Pilot Programs Sec. 401. Extend and modify assistance for administrative, oversight, and contract processing costs. Sec. 402. Extend and expand the direct to Phase II authority. Sec. 403. Acceleration of DoD SBIR and STTR awards. Sec. 404. Extend commercialization readiness program for civilian agencies. Sec. 405. Extend and expand Phase 0 proof of concept partnership program. Sec. 406. Extend commercialization assistance programs. Title V—Oversight and Simplification Initiatives Sec. 501. Annual reports to Congress. Sec. 502. Comptroller General reports on fraud controls. Sec. 503. Comptroller General report on diversification and commercialization. Sec. 504. Extend the report on award timeliness. Sec. 505. Pilot program to accelerate National Institutes of Health evaluation process. Sec. 506. Codifying safeguards for small business concerns majority-owned by venture capital operating companies, hedge funds, or private equity firms. Title VI—Technical Changes Sec. 601. Inclusion of SBICs in the SBIR and STTR programs. Sec. 602. Phase III and sole-source awards. I Reauthorization of Programs 101. Sense of Congress Section 9(a) of the Small Business Act ( 15 U.S.C. 638(a) ) is amended— (1) by inserting (1) before Research and development ; and (2) by adding at the end the following new paragraphs: (2) It is the sense of the Congress that— (A) the purpose of the SBIR and STTR programs is to strengthen the role of innovative small business concerns in Federally funded research and development, including— (i) stimulating technological innovation; (ii) using small business concerns to meet the needs of Federal research and development; (iii) fostering and encouraging participation of and by socially and economically disadvantaged small business concerns (as defined in section 8(a)(4)(A)) and small business concerns owned and controlled by women in technological innovation; and (iv) increasing private sector commercialization of innovations derived from Federal research and development, thereby increasing competition, productivity, and economic growth; and (B) in addition to the purposes set forth in subparagraph (A), the purpose of the STTR program is to reserve a portion of the extramural research or research and development budgets of Federal agencies to provide awards to small business concerns for cooperative research and development with research institutions. . 102. Extension of SBIR and STTR authority (a) SBIR Section 9 of the Small Business Act ( 15 U.S.C. 638 ) is amended by striking subsection (m). (b) STTR Section 9(n)(1)(A) of the Small Business Act ( 15 U.S.C. 638(n)(1)(A) ) is amended by striking through fiscal year 2025 . 103. Extension of FAST Program Section 34(i) of the Small Business Act ( 15 U.S.C. 657d(i) ) is amended by striking September 30, 2005 and inserting September 30, 2030 . II Diversification Initiatives 201. SBIR and STTR fellowships Section 9 of the Small Business Act ( 15 U.S.C. 638 ) is amended— (1) in subsection (f), by adding at the end the following new paragraph: (5) Fellowships (A) In general A Federal agency may provide grants or awards, either directly or in partnership with a third party, to small business concerns that have received SBIR or STTR Phase II awards to provide fellowship and internship opportunities at the undergraduate, baccalaureate, graduate, and postdoctoral levels in fields that are important to such Federal agency. (B) Enhanced outreach Each Federal agency that makes an award or enters into a partnership under subparagraph (A) shall provide for enhanced outreach to increase the participation of women, socially disadvantaged individuals (as described in section 8(a)(5)), and economically disadvantaged individuals (as described section 8(a)(6)(A)) in the fellowship and internship opportunities described under subparagraph (A). (C) Support organization Each Federal agency that makes an award or enters into a partnership under subparagraph (A) may partner with or provide grants or awards to a third-party organization to support and facilitate the enhanced outreach under subparagraph (B) provided that such third-party organization is a nonprofit organization with relevant experience and demonstrated expertise in delivery of services described in subparagraph (B). (D) Funding In carrying out this paragraph, a Federal agency may use only the following amounts: (i) With respect to a Federal agency that uses the authority under subsection (mm), the funds authorized under such subsection. (ii) With respect a Federal agency other than a Federal agency described in clause (i), not more than three percent of the funds required to be expended under paragraph (1). ; and (2) in subsection (n), by adding at the end the following new paragraph: (4) Fellowships (A) In general A Federal agency may provide grants or awards, either directly or in partnership with a third party, to small business concerns that have received SBIR or STTR Phase II awards to provide fellowship and internship opportunities at the undergraduate, baccalaureate, graduate, and postdoctoral levels in fields that are important to such Federal agency. (B) Enhanced outreach Each Federal agency that makes an award or enters into a partnership under subparagraph (A) shall provide for enhanced outreach to increase the participation of women, socially disadvantaged individuals (as described in section 8(a)(5)), and economically disadvantaged individuals (as described section 8(a)(6)(A)) in the fellowship and internship opportunities described under subparagraph (A). (C) Support organization Each Federal agency that makes an award or enters into a partnership under subparagraph (A) may partner with or provide grants or awards to a third-party organization to support and facilitate the enhanced outreach under subparagraph (B) provided such third-party organization is a nonprofit organization with relevant experience and demonstrated expertise in delivery of services described in subparagraph (B). (D) Funding In carrying out this paragraph, a Federal agency may use only the following amounts: (i) With respect to a Federal agency that uses the authority under subsection (mm), the funds authorized under such subsection. (ii) With respect a Federal agency other than a Federal agency described in clause (i), not more than three percent of the funds required to be expended under paragraph (1). . 202. Application assistance to broaden participation (a) In general Section 9(mm)(1) of the Small Business Act ( 15 U.S.C. 638(mm)(1) ) is amended— (1) in subparagraph (J), by striking and at the end; (2) in subparagraph (K), by striking the period at the end and inserting ; and ; and (3) by adding at the end the following new subparagraph: (L) providing small business concerns with assistance applying to the SBIR program or STTR program of the Federal agency, including providing such assistance to carry out the policy directive required under paragraphs (2)(F) or (5) of subsection (j) and subsection (p)(2)(H) to increase the participation of States with respect to which a low level of SBIR or STTR awards have historically been awarded. . (b) Enhanced minority institution participation (1) SBIR Section 9(j) of the Small Business Act ( 15 U.S.C. 638(j) ), is amended by adding at the end the following new paragraph: (5) Increased outreach requirements Not later than 90 days after the date of the enactment of this paragraph, the Administration shall modify the policy directives issued pursuant to this subsection to require enhanced outreach efforts to increase the participation of individuals conducting research at minority institutions (as defined in section 365 of the Higher Education Act of 1965 ( 20 U.S.C. 1067k )) and Hispanic-serving institutions (as defined in section 502(a) of such Act ( 20 U.S.C. 1101a(a) )) in SBIR programs. . (2) STTR Section 9(p)(2) of the Small Business Act ( 15 U.S.C. 638(p)(2) ) is amended— (A) in subparagraph (F), by striking and at the end; (B) in subparagraph (G)(iii), by striking the period at the end and inserting ; and ; and (C) by adding at the end the following new subparagraph: (H) procedures for outreach efforts to increase the participation of individuals conducting research at minority institutions (as defined in section 365 of the Higher Education Act of 1965 ( 20 U.S.C. 1067k )) and Hispanic-serving institutions (as defined in section 16 502(a) of such Act ( 20 U.S.C. 1101a(a) )) in STTR programs. . 203. Technical and business assistance improvements Section 9(q) of the Small Business Act ( 15 U.S.C. 638(q) ) is amended by— (1) in paragraph (1), in the matter preceding subparagraph (A)— (A) by striking may enter into an agreement with 1 or more vendors selected under paragraph (2)(A) to provide small business concerns engaged in SBIR or STTR projects with and inserting shall authorize recipients of awards under the SBIR program or the STTR program to select, if desired, commercialization activities provided under subparagraph (A), (B), or (C) of paragraph (3) to provide such recipients with ; and (B) by inserting cybersecurity assistance, after market validation, ; (2) in paragraph (3)— (A) by striking subparagraphs (A) and (B) and inserting the following: (A) Phase i A Federal agency described in paragraph (1) shall authorize a recipient of a Phase I SBIR or STTR award to use not more than $6,500 per project, in addition to the amount of the award of the recipient as determined appropriate by the head of the Federal agency, for the services described in paragraph (1)— (i) provided through a vendor selected under paragraph (2)(A); (ii) provided, to the extent authorized by the Federal agency, through a vendor other than a vendor selected under paragraph (2)(A); or (iii) provided through any combination of clauses (i) and (ii). (B) Phase ii A Federal agency described in paragraph (1) shall authorize a recipient of a Phase II SBIR or STTR award to use not more than $50,000 per project, included as part of the award of the recipient or in addition to the amount of the award of the recipient as determined appropriate by the head of the Federal agency, for the services described in paragraph (1)— (i) provided through a vendor selected under paragraph (2)(A); (ii) provided through a vendor other than a vendor selected under paragraph (2)(A); or (iii) provided through any combination of clauses (i) and (ii). ; and (B) in subparagraph (E), by inserting Phase I or before Phase II ; and (3) by adding at the end the following new paragraph: (5) I–corps participation (A) In general Each Federal agency that is required to conduct an SBIR or STTR program with an Innovation Corps program (established under section 601 of the American Innovation and Competitiveness Act ( 42 U.S.C. 1862s–8 ); commonly known as I–Corps ) shall— (i) provide an option for participation in an I–Corps teams course, I–Corps bootcamp, or another equivalent training program to recipients of an award under the SBIR or STTR program; and (ii) authorize the recipients described in clause (i) to use amounts authorized under this subsection to participate in the I–Corps teams course, I–Corps bootcamp, or another equivalent training program. (B) Cost of participation The cost of participation by a recipient described in subparagraph (A)(i) in an I–Corps course, I–Corps bootcamp, or another equivalent training program may be provided by— (i) an I–Corps team grant; (ii) funds awarded to the recipient under this subsection; (iii) the participating teams or other sources as appropriate; or (iv) any combination of sources described in clauses (i), (ii), and (iii). . 204. Improvements to website relating to the SBIR program or STTR program (a) SBIR program Section 9(g)(8) of the Small Business Act ( 15 U.S.C. 638(g)(8) ) is amended— (1) in subparagraph (B), by striking and at the end; (2) in subparagraph (C), by adding and at the end; and (3) by adding at the end the following new subparagraph: (D) for each research institution subcontracted by a recipient of a Phase I, Phase II, or Phase III SBIR award to perform research or research and development with respect to such award— (i) the name and location of such research institution; (ii) whether such research institution is— (I) an institution of higher education (as such term is defined in section 101 of the Higher Education Act of 1965 ( 20 U.S.C. 1001 )); (II) a nonprofit institution (as defined in section 4 of the Stevenson-Wydler Technology Innovation Act of 1980 ( 15 U.S.C. 3703 )) other than an institution of higher education; or (III) a federally funded research and development center (as identified by the National Scientific Foundation in accordance with the Federal Acquisition Regulation); and (iii) for each research institution that is an institution of higher education, whether such research institution is— (I) a part B institution (as defined in section 322 the Higher Education Act of 1965 ( 20 U.S.C. 1061 )); (II) a Hispanic-serving institution (as defined in section 502 of such Act ( 20 U.S.C. 1101a )); (III) a Tribal College or University (as defined in section 316 of such Act ( 20 U.S.C. 1059c )); (IV) an Alaska Native-serving institution or a Native Hawaiian-serving institution (as defined in section 317(b) of such Act ( 20 U.S.C. 1059d(b) )); (V) a Predominantly Black Institution (as defined in section 371(c) of such Act ( 20 U.S.C. 1067q(c) )); (VI) an Asian American and Native American Pacific Islander-serving institution (as defined in section 371(c) of such Act (20 U.S.C. 10 1067q(c))); or (VII) a Native American-serving nontribal institution (as defined in section 371(c) of such Act ( 20 U.S.C. 1067q(c) )); . (b) STTR program Section 9(o)(9) of the Small Business Act ( 15 U.S.C. 638(o)(9) ) is amended— (1) in subparagraph (B), by striking and at the end; (2) in subparagraph (C), by adding and at the end; and (3) by adding at the end the following new subparagraph: (D) for each research institution subcontracted by a recipient of a Phase I or Phase II STTR award to perform research or research and development with respect to such award— (i) the name and location of such research institution; (ii) whether such research institution is— (I) an institution of higher education (as such term is defined in section 101 of the Higher Education Act of 1965 ( 20 U.S.C. 1001 )); (II) a nonprofit institution (as defined in section 4 of the Stevenson-Wydler Technology Innovation Act of 1980 ( 15 U.S.C. 3703 )) other than an institution of higher education; or (III) a federally funded research and development center (as identified by the National Scientific Foundation in accordance with the Federal Acquisition Regulation); and (iii) for each research institution that is an institution of higher education, whether such research institution is— (I) a part B institution (as defined in section 322 the Higher Education Act of 1965 ( 20 U.S.C. 1061 )); (II) a Hispanic-serving institution (as defined in section 502 of such Act ( 20 U.S.C. 1101a )); (III) a Tribal College or University (as defined in section 316 of such Act ( 20 U.S.C. 1059c )); (IV) an Alaska Native-serving institution or a Native Hawaiian-serving institution (as defined in section 317(b) of such Act ( 20 U.S.C. 1059d(b) )); (V) a Predominantly Black Institution (as defined in section 371(c) of such Act ( 20 U.S.C. 1067q(c) )); (VI) an Asian American and Native American Pacific Islander-serving institution (as defined in section 371(c) of such Act (20 U.S.C. 25 1067q(c))); or (VII) a Native American-serving nontribal institution (as defined in section 371(c) of such Act ( 20 U.S.C. 1067q(c) )); . (c) Database reporting (1) In general Section 9(k) of the Small Business Act ( 15 U.S.C. 638(k) ) is amended— (A) by striking Phase I or Phase II SBIR or STTR each place it appears and inserting Phase I, Phase II, or Phase III SBIR or STTR ; (B) in paragraph (1)(B)— (i) in clause (ii), by striking and at the end; (ii) in clause (iii), by adding and at the end; and (iii) by adding at the end the following new clause: (iv) information regarding any research institution subcontracted by such small business concern to perform research or research and development with respect to such award, including— (I) the name and location of such research institution; (II) whether such research institution is— (aa) an institution of higher education (as such term is defined in section 101 of the Higher Education Act of 1965 ( 20 U.S.C. 1001 )); (bb) a nonprofit institution (as defined in section 4 of the Stevenson-Wydler Technology Innovation Act of 1980 ( 15 U.S.C. 3703 )) other than an institution of higher education; or (cc) a federally funded research and development center (as identified by the National Scientific Foundation in accordance with the Federal Acquisition Regulation); and (III) for each research institution that is an institution of higher education (as such term is defined in section 101 of the Higher Education Act of 1965 ( 20 U.S.C. 1001 )), whether such research institution is an institution described in paragraphs (1) through (7) of section 371(a) of such Act ( 20 U.S.C. 1067q(a) ); ; (C) in paragraph (2)— (i) in subparagraph (A), by striking Phase I or Phase II of the SBIR program or the STTR and inserting Phase I, Phase II, or Phase III of the SBIR program or the STTR ; (ii) in subparagraph (F), by striking and at the end; (iii) in subparagraph (G)(ii), by striking the period at the end and inserting ; and ; and (iv) by adding at the end the following new subparagraph: (H) contains information for each research institution subcontracted by a recipient of a Phase I, Phase II, or Phase III STTR or SBIR award to perform research or research and development with respect to such award, including— (i) the name and location of such research institution; (ii) whether such research institution is— (I) an institution of higher education (as such term is defined in section 101 of the Higher Education Act of 1965 ( 20 U.S.C. 1001 )); (II) a nonprofit institution (as defined in section 4 of the Stevenson-Wydler Technology Innovation Act of 1980 ( 15 U.S.C. 3703 )) other than an institution of higher education; or (III) a federally funded research and development center (as identified by the National Scientific Foundation in accordance with the Federal Acquisition Regulation); and (iii) for each research institution that is an institution of higher education (as such term is defined in section 101 of the Higher Education Act of 1965 ( 20 U.S.C. 1001 )), whether such research institution is an institution described in paragraphs (1) through (7) of section 371(a) of such Act ( 20 U.S.C. 1067q(a) ). ; and (D) in paragraph (3)(C), by striking Phase I or Phase II award each place it appears and inserting Phase I, Phase II, or Phase III award . (2) Database update deadline Notwithstanding paragraphs (1) or (2) of section 9(k) of the Small Business Act ( 15 U.S.C. 638(k) ), the Administrator shall, not later than 1 year after the date of the enactment of this Act, include— (A) in the database described such paragraph (1) the information required under such paragraph, as amended by subparagraphs (A) and (B) of paragraph (1) of this Act; and (B) in the database described such paragraph (2) the information required under such paragraph, as amended by subparagraphs (A) and (C) of paragraph (1) of this Act. III Commercialization Improvements 301. Phase III award education Section 9(r) of the Small Business Act ( 15 U.S.C. 638(r) ) is amended by adding at the end the following new paragraph: (5) Workforce training (A) In general The Administrator, in coordination with the Secretary of Defense, the Administrator of the General Services Administration, and the head of any such other Federal agency that the Administrator determines appropriate, shall establish training activities for contracting officers and agency acquisition workforce of Federal agencies to ensure that such individuals are fully aware of all aspects of Phase III acquisitions under the SBIR and STTR programs, as applicable. (B) Training topics The training activities required under subparagraph (A) shall include training on— (i) the missions, goals, and authorities of the SBIR and STTR programs; (ii) the use of Phase III agreement; and (iii) Phase III data rights. (C) Definitions In this paragraph: (i) Agency acquisition workforce The term agency acquisition workforce means the employees of a Federal agency that have procurement or acquisition responsibilities, including— (I) employees described in section 1703 of title 41, United States Code; and (II) individuals that are part of the acquisition workforce (as such term is defined in section 101(a) of title 10, United States Code). (ii) Phase III acquisition The term Phase III acquisition means the acquisition of a good or service from a participant in Phase III that such participant has commercialized or is seeking to commercialize as such a participant. . 302. Report on DoD denials of Phase III Section 9(r) of the Small Business Act ( 15 U.S.C. 638(r) ), as amended by section 301, is further amended by adding at the end the following new paragraph: (6) Reporting Not later than 30 days after the date on which the Department of Defense denies a small business concern Phase III agreement, the Secretary of Defense shall report that denial to the Administrator. . IV Pilot Programs 401. Extend and modify assistance for administrative, oversight, and contract processing costs (a) In general Section 9(mm) of the Small Business Act ( 15 U.S.C. 638(mm) ), as amended by section 202, is further amended— (1) by designating the text of paragraph (1) as subparagraph (A); and (2) in paragraph (1)— (A) by redesignating subparagraphs (A) through (L) as clauses (i) through (xii), respectively; (B) by striking September 30, 2025 and inserting September 30, 2030 ; (C) by striking 3 percent and inserting 3.3 percent ; and (D) by adding at the end the following new subparagraph: (B) Transfer of funds (i) In general Not later than 2 months after the date of the enactment of an Act providing appropriations for the Department of Defense, the Department of Energy, the Department of Health and Human Services, the National Aeronautics and Space Administration, or the National Science Foundation, the head of each such entity for which such Act provided appropriations shall transfer not less than 10 percent of the funds described under subparagraph (A) to the Administrator to increase the resources of the Administration for administering the SBIR and STTR programs. (ii) Fund use limits None of the funds transferred under clause (i) may be used for or with respect to any program established under the Small Business Investment Act of 1958 ( 15 U.S.C. 661 et seq. ). . (b) Increasing participation of underserved populations in the SBIR and STTR programs (1) In general Section 9(mm)(2) of the Small Business Act ( 15 U.S.C. 638(mm)(2) ) is amended to read as follows: (2) Outreach and technical assistance A Federal agency participating in the program under this subsection may use a portion of the funds authorized for uses under paragraph (1) to carry out the policy directive required under subsection (j)(2)(F) and to increase the participation of States with respect to which a low level of SBIR awards have historically been awarded. . (2) Conforming amendment Section 9(mm)(6) of the Small Business Act ( 15 U.S.C. 638(mm)(6) ) is amended by striking including and all that follows and inserting the following: including— (A) the use of funds transferred under subparagraph (B) of paragraph (1) for the uses authorized in such subparagraph and to achieve the objectives of paragraph (2); and (B) the use of other funds under this subsection to achieve such objectives. . 402. Extend and expand the direct to Phase II authority Section 9 of the Small Business Act ( 15 U.S.C. 638 ) is amended— (1) by designating the text of subsection (cc) as paragraph (1); and (2) in subsection (cc)— (A) by striking 2012 through 2025 and inserting 2012 through 2030 ; (B) by striking the National Institutes of Health, the Department of Defense, and the Department of Education may each and inserting each Federal agency required to carry out an SBIR program may ; and (C) by adding at the end the following new paragraphs: (2) Limitation The total value of awards provided by a Federal agency under this subsection in a fiscal year shall be— (A) except as provided in subparagraph (B), not more than 10 percent of the total funds allocated to the SBIR program of the Federal agency during that fiscal year; and (B) with respect to the National Institutes of Health, not more than 15 percent of the total funds allocated to the SBIR program of the National Institutes of Health during that fiscal year. (3) Report Each head of a Federal agency that exercises the authority under this subsection shall include in the next report submitted by such Federal agency under (g)(9) following such exercise the number and amount of awards provided under this subsection by such Federal agency in the period covered by such report. . 403. Acceleration of DoD SBIR and STTR awards (a) In general Section 9(hh) of the Small Business Act ( 15 U.S.C. 638(hh) ) is amended— (1) in the heading, by inserting and Simplified DoD Forms after of funding ; and (2) by amending paragraph (2) to read as follows: (2) Accelerate department of defense sbir and sttr awards (A) In general Notwithstanding subsections (g)(4) and (o)(4), the Under Secretary of Defense for Research and Engineering, acting through the Director of Defense Procurement and Acquisition Policy of the Department of Defense, shall develop simplified and standardized procedures and model contracts throughout the Department of Defense for Phase I, Phase II, and Phase III SBIR awards that, to the extent practicable, reduce the amount of time between the provision of notice of such awards and the subsequent release of funding with respect to the awards to 90 days. (B) Consultation In carrying out subparagraph (A), the Director of Defense Procurement and Acquisition Policy of the Department of Defense shall consult with the Director of the Office of Small Business Programs of the Department of Defense. . (b) Timing The Under Secretary of Defense for Research and Engineering, acting through the Director of Defense Procurement and Acquisition Policy of the Department of Defense, shall carry out section 9(hh)(2) of the Small Business Act ( 15 U.S.C. 638(hh)(2) ), as amended by subsection (a), not later than 1 year after the date of the enactment of this Act. 404. Extend commercialization readiness program for civilian agencies Section 9(gg) of the Small Business Act ( 15 U.S.C. 638(gg) ) is amended— (1) in the heading, by striking Pilot and inserting Civilian agencies commercialization readiness ; (2) by striking pilot program each place it appears and inserting covered program ; and (3) by striking fiscal year 2025 and inserting fiscal year 2030 . 405. Extend and expand Phase 0 proof of concept partnership program Section 9(jj) of the Small Business Act ( 15 U.S.C. 638(jj) ) is amended— (1) in the subsection heading, by striking Pilot ; (2) in paragraph (1)— (A) by striking Director of the National Institutes of Health and inserting head of a covered agency ; (B) by striking pilot program and inserting program ; (C) by striking the Director shall award and inserting the head of each covered agency shall make ; and (D) by striking grants each place it appears and inserting awards ; (3) by amending paragraph (2) to read as follows: (2) Definitions In this subsection— (A) the term covered agency means the National Institutes of Health, the National Science Foundation, the National Aeronautics and Space Administration, and the Department of Energy; (B) the term Phase 0 program means a Proof of Concept Partnership program; and (C) the term qualifying institution mean— (i) a university or other research institution that participates in the STTR program of the National Institutes of Health, National Science Foundation, National Aeronautics and Atmospheric Administration, Department of Energy, or Department of Defense; or (ii) another U.S.-based organization with relevant expertise and capability in technology translation, technology entrepreneurship, or technical research and development. ; (4) in paragraph (3)— (A) by amending subparagraph (A) to read as follows: (A) In general A Proof of Concept Partnership shall be set up by a qualifying institution to make awards to individual researchers in support of proof of concept work and commercialization mentoring needed to translate promising research projects and technologies into a viable company. ; and (B) in subparagraph (B)— (i) in the matter preceding clause (i)— (I) by striking Proof of Concept Partnership program and inserting Phase 0 program ; and (II) by striking award grants and inserting make awards ; (ii) by redesignating clause (ii) as clause (iv); and (iii) by inserting after clause (i) the following new clauses: (ii) Eligible individual researchers include faculty members, university staff, industrial scientists, owners of small business concerns, postdoctoral scholars, and students. (iii) Awards may support technical validations, market research, entrepreneurial training, clarifying intellectual property rights position and strategy, and investigating commercial or business opportunities. ; (5) in paragraph (4)— (A) in subparagraph (A)— (i) by striking The Director and inserting The head of a covered agency ; and (ii) by striking $1,000,000 and inserting $1,500,000 ; and (B) in subparagraph (B)— (i) in the matter preceding clause (i), by striking In determining and all that follows through qualifying institutions— and inserting the following: In determining which qualifying institutions receive awards under the Phase 0 program, the head of a covered agency shall consider, in addition to any other criteria such head determines necessary, the extent to which the qualifying institution— ; (ii) by amending clause (i) to read as follows: (i) have an established and proven record of working in the areas of technology transfer, technology or commercialization, entrepreneurial development, or another related innovation practice; ; (iii) in clause (iv), by inserting academic, after industry, ; and (iv) by amending clause (v) to read as follows: (v) have demonstrated a plan for encouraging participation of small business concerns owned and controlled by socially and economically disadvantaged individuals and small business concerns owned and controlled by women; ; (6) in paragraph (6)— (A) in the matter preceding subparagraph (A)— (i) by striking The Director and inserting The head of each covered agency ; and (ii) by striking pilot program and inserting Phase 0 program implemented by such head ; (B) in subparagraph (B), by striking the pilot program and inserting such Phase 0 program ; (C) in subparagraph (C), by striking the pilot program and inserting such Phase 0 program ; (D) in subparagraph (D), by striking the pilot program and inserting such Phase 0 program ; and (E) in subparagraph (E)— (i) by striking the program’s effectiveness and inserting the effectiveness of such Phase 0 program ; and (ii) by inserting after supporting data the following: , including how the program contributes to the implementation of the policy directive required under subsection (j)(2)(F) ; and (7) by striking paragraph (7). 406. Extend commercialization assistance programs Section 9(uu) of the Small Business Act ( 15 U.S.C. 638(uu) ) is amended— (1) in the heading, by striking Pilot ; (2) by striking subsequent Phase II each place it appears and inserting third Phase II ; (3) in paragraph (1), by amending the heading to read as follows: Program implementations ; (4) by striking pilot each place it appears; (5) in paragraph (3), by striking September 30, 2025 and inserting September 30, 2030 ; (6) in paragraph (5)(B)— (A) by striking An eligible entity and inserting the following: (i) In general An eligible entity ; and (B) by adding at the end the following new clause: (ii) Certain agency funds An eligible entity may use funds received from Federal agencies, other than funds received under an SBIR or STTR program, to meet the matching requirement of subparagraph (A). ; (7) by redesignating paragraph (10) as paragraph (11); (8) by inserting after paragraph (9) the following new paragraph: (10) Timing An eligible entity may apply for and receive a third Phase II award any time after the eligible entity receives an additional Phase II SBIR award under subsection (ff), including after the completion of such additional Phase II SBIR award. ; and (9) in subparagraph (E) of paragraph (11), as so redesignated, in the heading, by striking subsequent Phase II and inserting third Phase II . V Oversight and Simplification Initiatives 501. Annual reports to Congress Section 9 of the Small Business Act ( 15 U.S.C. 638 ) is amended— (1) in subsection (g)(9)— (A) by inserting Congress, after SBIR program to ; (B) by inserting a comma after Administration ; and (C) by inserting after Technology Policy the following: and publish such report on the website of such Federal agency as soon as practicable ; (2) in subsection (o)(10)— (A) by inserting Congress, after STTR program to ; (B) by inserting a comma after Administration ; and (C) by inserting after Technology Policy the following: and publish such report on the website of such Federal agency as soon as practicable ; and (3) in subsection (gg)(6), by inserting Congress and after agency to . 502. Comptroller General reports on fraud controls (a) Report on study with respect to venture capital operating company, hedge fund, and private equity firm involvement Section 5142 of the National Defense Authorization Act for Fiscal Year 2012 ( 15 U.S.C. 638a ) is amended by inserting through December 31, 2027 after every 3 years thereafter . (b) Report on program To fight fraud, waste, and abuse Section 5143(b) of the National Defense Authorization Act for Fiscal Year 2012 ( 15 U.S.C. 638b(b) ) is amended by inserting through December 31, 2027, after every 4 years thereafter . 503. Comptroller General report on diversification and commercialization (a) In general Not later than three years after the date of the enactment of this Act, the Comptroller General of the United States 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 effectiveness of the SBIR and STTR programs with respect to diversification of participants and commercialization. (b) Contents The report shall include, to the extent practicable, an assessment of— (1) the demographics of small business concerns receiving SBIR or STTR awards, including new entrants and underrepresented groups; (2) the efforts of participating agencies to broaden representation and participation of new entrants and underrepresented groups in the SBIR and STTR programs; (3) how participating agencies develop solicitation topics and attract applicants; (4) the efforts of participating agencies to support technology commercialization; (5) the extent to which the SBIR and STTR awards made by each participating agency align with the research priorities and technology needs of that participating agency; and (6) such other matters as the Comptroller General, in consultation with the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business of the House of Representatives, determines appropriate. (c) Definitions In this section: (1) Federal agency; sbir; sttr The terms Federal agency , SBIR , and STTR have the meanings given such terms in section 9(e) of the Small Business Act ( 15 U.S.C. 638(e) ). (2) New entrant The term new entrant means a small business concern that has not previously received an SBIR or STTR award. (3) Underrepresented groups The term underrepresented groups means small business concerns located in States with respect to which a low level of SBIR and STTR awards have historically been awarded, small business concerns owned and controlled by women, and small business concerns owned and controlled by socially and economically disadvantaged individuals. (4) Participating agency The term participating agency means a Federal agency carrying out an SBIR or STTR program under section 9 of the Small Business Act ( 15 U.S.C. 638 ). (5) Small business concern The term small business concern has the meaning given such term under section 3 of the Small Business Act ( 15 U.S.C. 632 ). (6) Small business concern owned and controlled by socially and economically disadvantaged individuals; small business concern owned and controlled by women The terms small business concern owned and controlled by socially and economically disadvantaged individuals and small business concern owned and controlled by women have the meanings given such terms in section 8(d) of the Small Business Act ( 15 U.S.C. 637(d) ). 504. Extend the report on award timeliness Section 9(ii)(2)(A) of the Small Business Act ( 15 U.S.C. 638(ii)(2)(A) ) is amended— (1) in the matter preceding clause (i), by striking 3 years and inserting 11 years ; (2) in clause (i), by striking and at the end; (3) by redesignating clause (ii) as clause (iii); and (4) by inserting after clause (i) the following new clause: (ii) provides the average and median amount of time that each Federal agency with an SBIR or STTR program takes to review and make a final decision on proposals submitted under the program; and . 505. Pilot program to accelerate National Institutes of Health evaluation process (a) In general Section 9(hh) of the Small Business Act ( 15 U.S.C. 638(hh) ) is amended by adding at the end the following new paragraph: (3) Pilot program to accelerate the national institutes of health sbir and sttr awards (A) In general Not later than 1 year after the date of the enactment of this paragraph, the Director of the National Institutes of Health shall establish a pilot program to reduce the time for awards under the SBIR and STTR programs of the National Institutes of Health. (B) Award procedures In carrying out the pilot program under subparagraph (A), the Director shall develop simplified and standardized procedures across all relevant awarding offices at the National Institutes of Health and reduce the amount of time between the provision of notice of such awards and the subsequent release of funding with respect to the awards to be as close to 90 days as possible. (C) Merit review (i) In general Under the pilot program under subparagraph (A), the Director of the National Institutes of Health may, with respect to awards under the SBIR and STTR programs of the National Institute of Health, use such peer review procedures (including consultation with appropriate scientific experts) as the Director determines to be appropriate to obtain assessments of scientific and technical merit and potential for commercialization. (ii) Deemed The use of peer review procedures under clause (i) shall be deemed to fulfill any requirements applicable to the award under the SBIR or STTR program of the National Institute of Health under sections 406(a)(3)(A) and 492 of the Public Health Service Act ( 42 U.S.C. 284a(a)(3)(A) ; 289a). (D) Termination The pilot program under subparagraph (A) shall terminate on September 30, 2030. . (b) Evaluation report Not later than three years after the date of enactment of this Act, the Director of the National Institutes of Health shall submit to the Committees on Small Business and Science, Space, and Technology of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate an evaluation of the pilot program established under paragraph (3) of section 9(hh) of the Small Business Act ( 15 U.S.C. 638(hh) ), as added by subsection (a), including an analysis of the peer review procedures used under subparagraph (C) of such paragraph and the effects on award times. 506. Codifying safeguards for small business concerns majority-owned by venture capital operating companies, hedge funds, or private equity firms (a) In general Section 9(dd) of the Small Business Act ( 15 U.S.C. 638(dd) ) is amended— (1) in paragraph (6)(B), by striking If a Federal and inserting Except as provided in paragraph (8), if a Federal ; and (2) by adding at the end the following new paragraph: (8) Participation limits (A) In general A small business concern that is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms is ineligible to receive an award under any SBIR program if the Administrator determines that such small business concern is, or is owned and controlled in majority part by, a covered foreign entity. (B) Ownership determination In determining whether a small business concern is ineligible to receive an award under any SBIR program under subparagraph (A), the Administrator shall consider whether the small business concern is a direct or indirect subsidiary of a foreign-owned firm. (C) Size standards The Administrator shall establish size standards for small business concerns seeking to participate in an SBIR program solely under the authority under this section. (D) Definitions In this paragraph: (i) Covered foreign entity the term covered foreign entity — (I) means— (aa) a foreign entity of concern; (bb) a government or political party of a foreign country of concern; (cc) a natural person who is not a lawful permanent resident of the United States, citizen of the United States, or any other protected individual (as such term is defined in section 274B(a)(3) of the Immigration and Nationality Act ( 8 U.S.C. 1324b(a)(3) )); or (dd) a partnership, association, corporation, organization, or other combination of persons organized under the laws of or having its principal place of business in a foreign country of concern; and (II) includes— (aa) any person owned by, controlled by, or subject to the jurisdiction or direction of a an entity listed in subclause (I); (bb) any person, wherever located, who acts as an agent, representative, or employee of an entity listed in subclause (I); (cc) any person who acts in any other capacity at the order, request, or under the direction or control, of an entity listed in subclause (I), or of a person whose activities are directly or indirectly supervised, directed, controlled, financed, or subsidized in whole or in majority part by an entity listed in subclause (I); (dd) any person who directly or indirectly through any contract, arrangement, understanding, relationship, or otherwise, owns 25 percent or more of the equity interests of an entity listed in subclause (I); (ee) any person with significant responsibility to control, manage, or direct an entity listed in subclause (I); (ff) any person, wherever located, who is a citizen or resident of a country controlled by an entity listed in subclause (I); or (gg) any corporation, partnership, association, or other organization organized under the laws of a country controlled by an entity listed in subclause (I). (ii) Foreign entity of concern The term foreign entity of concern means a foreign entity that is— (I) designated as a foreign terrorist organization by the Secretary of State under section 219(a) of the Immigration and Nationality Act ( 8 U.S.C. 1189(a) ); (II) included on the list of specially designated nationals and blocked persons maintained by the Office of Foreign Assets Control of the Department of the Treasury (commonly known as the SDN list); (III) owned by, controlled by, or subject to the jurisdiction or direction of a government of a foreign country that is a covered nation (as such term is defined in section 4872 of title 10, United States Code); (IV) alleged by the Attorney General to have been involved in activities for which a conviction was obtained under— (aa) chapter 37 of title 18, United States Code (commonly known as the Espionage Act); (bb) section 951 or 1030 of such title; (cc) chapter 90 of such title (commonly known as the Economic Espionage Act of 1996); (dd) the Arms Export Control Act ( 22 U.S.C. 2751 et seq. ); (ee) section 224, 225, 226, 227, or 236 of the Atomic Energy Act of 1954 ( 42 U.S.C. 2274 , 2275, 2276, 2277, and 2284); (ff) the Export Control Reform Act of 2018 ( 50 U.S.C. 4801 et seq. ); or (gg) the International Emergency Economic Powers Act ( 50 U.S.C. 1701 et seq. ); or (V) determined by the Secretary of Commerce, in consultation with the Secretary of Defense and the Director of National Intelligence, to be engaged in unauthorized conduct that is detrimental to the national security or foreign policy of the United States. . (b) Applicability The amendments made by subsection (a) shall apply only with respect to awards made under an Small Business Innovation Research Program (as defined in section 9(e) of the Small Business Act ( 15 U.S.C. 638(e) )) after the date of the enactment of this Act. VI Technical Changes 601. Inclusion of SBICs in the SBIR and STTR programs Section 9 of the Small Business Act ( 15 U.S.C. 638 ) is amended— (1) by striking or private equity firm investment each place that term appears and inserting private equity firm, or SBIC investment ; (2) by striking or private equity firms each place that term appears and inserting private equity firms, or SBICs ; (3) in subsection (e)— (A) in paragraph (18), by striking and at the end; (B) in paragraph (19), by striking the period at the end and inserting ; and ; and (C) by adding at the end the following new paragraph: (15) the term SBIC means a small business investment company as defined in section 103 of the Small Business Investment Act of 1958 ( 15 U.S.C. 662 ). ; and (4) in the heading for subsection (dd), by striking or Private Equity Firms and inserting Private Equity Firms, or SBICs . 602. Phase III and sole-source awards Section 9(r) of the Small Business Act ( 15 U.S.C. 638 ) is amended— (1) in the heading, by inserting Sole Source and Other after Justification for ; and (2) in the heading for paragraph (4), by inserting sole source and other after justification for .