Small Business Innovation Development Act of 1982
PL 97-219 (S.881), enacted 07/22/1982

PUBLIC LAW 97-219—JULY 22, 1982 
96 STAT. 217 
Public Law 97-219 
97th Congress 
An Act 
To amend the Small Business Act to strengthen the role of the small, innovative 
firms in federally funded research and development, and to utilize Federal research 
and development as a base for technological innovation to meet agency needs and 
to contribute to the growth and strength of the Nation's economy. 
Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled. 
SECTION 1. This Act may be cited as the "Small Business Innova-
tion Development Act of 1982". 
SEC. 2. (a) The Congress finds that— 
(1) technological innovation creates jobs, increases productiv-
ity, competition, and economic growth, and is a valuable coun-
terforce to inflation and the United States balance-of-pajinents 
deficit; 
(2) while small business is the principal source of significant 
innovations in the Nation, the vast majority of federally funded 
research and development is conducted by large businesses, 
universities, and Government laboratories; and 
(3) small businesses are among the most cost-effective per-
formers of research and development and are particularly capa-
ble of developing research and development results into new 
products. 
GJ) Therefore, the purposes of the Act are— 
(1) to stimulate technological innovation; 
(2) to use smgdl business to meet Federal research and devel-
opment needs; 
(3) to foster and encourage participation by minority and 
disadvantaged persons in technological innovation; and 
(4) to increase private sector commercialization innovations 
derived from Federal research and development. 
SEC. 3. Section 9(b) of the Small Business Act is amended— 
(1) by striking out "and" at the end of paragraph (2); 
(2) by striking out the period at the end of paragraph (3) and 
inserting in lieu thereof "; and"; and 
(3) by adding at the end thereof the following: 
"(4) to develop and maintain a source file and an information 
program to assure each qualified and intere^ed small business 
concern the opportunity to participate in Federal agency small 
business innovation research programs; 
"(5) to coordinate with participating agencies a schedule for 
release of SBIR solicitations, and to prepare a master release 
schedule so as to maximize small businesses' opportunities to 
respond to solicitations; 
"(6) to independently survey and monitor the operation of 
SBIR programs within participating Federal agencies; and 
"(7) to report not less than annually to the Committee on 
Smedl Business of the Senate and the Committee on Small 
Business of the House of Representatives on the SBIR programs 
July 22, 1982 
[S. 881] 
Small Business 
Innovation 
Development 
Act of 1982. 
15 u s e 631 note. 
15 u s e 638 note. 
15 u s e 638. 
Report to 
congressional 
committees. 
96 STAT. 218 
PUBLIC LAW 97-219—JULY 22, 1982 
of the Federal agencies and the Administration's information 
and monitoring efforts related to the SBIR programs,". 
15 use 638. 
SEC. 4. Section 9 of the Small Business Act is amended by adding 
at the end thereof the following new subsections: 
Definitions. 
"(e) For the purpose of this section— 
"(1) the term 'extramural budget' means the sum of the total 
obligations minus amounts obligated for such activities by 
employees of the agency in or through Government-owned, 
Government-operated facilities, except that for the Agency for 
International Development it shall not include amounts obli-
gated solely for general institutional support of international 
research centers or for grants to foreign countries; 
"(2) the term 'Federal agency' means an executive agency as 
defined in section 105 of title 5, United States Code, or a 
military department as defined in section 102 of such title, 
except that it does not include any agency within the Intelli-
gence Community (as the term is defined in section 3.4(f) of 
Executive Order 12333 or its successor orders); 
"(3) the term 'funding agreement' means any contract, grant, 
or cooperative agreement entered into between any Federal 
agency and any small business for the performance of experi-
mental, developmental, or research work funded in whole or in 
part by the Federal Government; 
"(4) the term 'Small Business Innovation Research Program' 
or 'SBIR' means a program under which a portion of a Federal 
agency's research or research and development effort is 
reserved for award to small business concerns through a uni-
form process having— 
"(A) a first phase for determining, insofar as possible, the 
scientific and technical merit and feasibility of ideas sub-
mitted pursuant to SBIR program solicitations; 
"(B) a second phase to further develop the proposed ideas 
to meet the particular program needs, the awarding of 
which shall take into consideration the scientific and tech-
nical merit and feasibility evidenced by the first phase and, 
where two or more proposals are evaluated as being of 
approximately equal scientific and technical merit and feas-
ibility, special consideration shall be given to those propos-
als that have demonstrated third phase, non-Federal capital 
commitments; and 
"(C) where appropriate, a third phase in which non-
Federal capital pursues commercial applications of the 
research or research and development and which may also 
involve follow-on non-SBIR funded production contracts 
with a Federgd agency for products or processes intended 
for use by the United States Government; and 
"(5) the term 'research' or 'research and development' means 
any activity which is (A) a systematic, intensive study directed 
toward greater knowledge or understanding of the subject stud-
ied; (B) a systematic study directed specifically toward appl3ring 
new knowledge to meet a recognized need; or (C) a systematic 
application of knowledge toward the production of useful mate-
rials, devices, and systems or metho<fe, including design, devel-
opment, and improvement of protot3rpes and new processes to 
meet specific requirements. 
Research or 
"(fKD Each Federal sigency which has an extramural budget for 
research 
research or research and development in excess of $100,000,000 for 
development, 
budget. 
PUBLIC LAW 97-219—JULY 22, 1982 
96 STAT. 219 
fiscal year 1982, or any fiscal year thereafter, shall expend not less 
than 0.2 per centum of its extramural budget in fiscal year 1983 or 
in such subsequent fiscal year as the agency has such budget, not 
less than 0.6 per centum of such budget in the second fiscsd year 
thereafter, not less than 1 per centum of such budget in the third 
fiscal year thereafter, and not less than 1.25 per centum of such 
budget in all subsequent fiscsJ years with small business concerns 
specifically in connection with a small business innovation research 
program which meets the requirements of the Small Business Inno-
vation Development Act of 1982 and regulations issued thereunder: 
Provided, That any Federal agency which has an extramural budget 
for 
research 
or 
research 
and 
development 
in 
excess 
of 
$10,000,000,000 for fiscal year 1982 shall expend not less than 0.1 per 
centum of its extramural budget in fiscal year 1983, not less than 0.3 
per centum of such budget in the second fiscal year thereafter, not 
less than 0.5 per centum of such budget in the third fiscal year 
thereafter, not less than 1 per centum of such budget in the fourth 
fiscal year thereafter, and not less than 1.25 per centum of such 
budget in all subsequent fiscal years with small business concerns 
specifically in connection with a small business innovation research 
program which meets the requirements of the Small Business Inno-
vation Development Act of 1982 and regulations issued thereunder: 
Provided further. That a Federal agency shall not make available 
for the purpose of meeting the requirements of this subsection an 
amount of its extramural budget for basic research or research and 
development which exceeds the percentages specified herein. Fund-
ing agreements with small business concerns for research or 
research and development which result from competitive or single 
source selections other than under a small business innovation 
research program shall not be counted as meeting any portion of the 
percentEige requirements of this subsection. 
"(2) Amounts appropriated for atomic energy defense programs of 
the Department of Energy shedl for the purposes of paragraph (1) be 
excluded from the amount of the research or research and develop-
ment budget of that Department. 
"(g) Each Federal agency required by subsection (f) to establish a 
small business innovation research program shall, in accordance 
with this Act and regulations issued hereunder— 
"(1) unilaterally determine categories of projects to be in its 
SBIR program; 
"(2) issue small business innovation research solicitations in 
accordance with a schedule determined cooperatively with the 
Small Business Administration; 
"(3) unilaterally receive and evaluate proposals resulting 
from SBIR proposals; 
"(4) unilaterally select awardees for its SBIR funding 
agreements; 
"(5) administer its own SBIR funding agreements (or delegate 
such administration to another agency); 
"(6) make payments to recipients of SBIR funding agreements 
on the basis of progress toward or completion of the funding 
agreement requirements; and 
"(7) make an annual report on the SBIR program to the Small 
Business Administration and the Office of Science and Technol-
ogy Policy. 
"(h) In addition to the requirements of subsection (f), each Federal 
agency which has a budget for research or research and develop-
Small business 
innovation 
research 
program, 
requirements. 
96 STAT. 220 
PUBLIC LAW 97-219—JULY 22, 1982 
ment in excess of $20,000,000 for any fiscal year beginning with 
fiscal year 1983 or subsequent fiscal year shall establish goals 
specifically for funding agreements for research or research and 
development to smsill business concerns, and no goal established 
under this subsection shall be less than the percentage of the 
agency's research or research and development budget expended 
under funding agreements with small business concerns in the 
immediately preceding fiscal year, 
"(i) Each Federal agency required by this section to have an SBIR 
program or to establish goals shall report annually to the Small 
Business Administration the number of awards pursuant to grants, 
contracts, or cooperative agreements over $10,000 in amount and 
the dollar value of all such awards, identif3dng SBIR awards and 
comparing the number and amount of such awards with awards to 
other than small business concerns. 
Policy directives. 
"(j) The Small Business Administration, after consultation with 
the Administrator of the Office of Federal Procurement Policy, the 
Director of the Office of Science and Technology Policy, and the 
Intergovernmental Affairs Division of the Office of Management 
and Budget, shall, within one hundred and twenty days of the 
enactment of the Small Business Innovation Development Act of 
1982, issue policy directives for the general conduct of the SBIR 
programs within the Federal Government, including providing for— 
"(1) simplified, standardized, and timely SBIR solicitations; 
"(2) a simplified, standardized funding process which provides 
for (A) the timely receipt and review of proposals; (B) outside 
peer review for at least phase two proposals, if appropriate; (C) 
protection of proprietary information provided in proposals; (D) 
selection of awardees; (E) retention of rights in data generated 
in the performance of the contract by the small business con-
cern; (F) transfer of title to property provided by the agency to 
the small business concern if such a transfer would be more cost 
effective than recovery of the property by the agency; (G) cost 
sharing; and (H) cost principles and payment schedules; 
"(3) exemptions from the regulations under paragraph (2) if 
national security or intelligence functions clearly would be 
jeopardized; 
"(4) minimizing regulatory burden associated with participa-
tion in the SBIR program for the smeill business concern which 
will stimulate the cost-effective conduct of Federal research and 
development and the likelihood of commercialization of the 
results of research and development conducted under the SBIR 
program; and 
"(5) simplified, standardized, and timely annual report on the 
SBIR program to the Small Business Administration and the 
Office of Science and Technology Policy, 
"(k) The Director of the Office of Science and Technology Policy, 
in consultation with the Federal Coordinating Council for Science, 
Engineering and Research, shall, in addition to such other responsi-
bilities imposed upon him by the Small Business Innovation Devel-
opment Act of 1982— 
"(1) independently survey and monitor all phases of the 
implementation and operation of SBIR programs within agen-
cies required to establish an SBIR program, including compli-
ance with the expenditures of funds according to the require-
ments of subsection (f) of this section; and 
PUBLIC LAW 97-219—JULY 22, 1982 
96 STAT. 221 
"(2) report not less than annually, and at such other times as 
the Director may deem appropriate, to the Committees on Small 
Business of the Senate and the House of Representatives on all 
phases of the implementation and operation of SBIR programs 
within agencies required to establish an SBIR program, 
together with such recommendations as the Director may deem 
appropriate.". 
SEC. 5. Effective October 1, 1988, paragraphs (4) through (7) of 
section 9(b) of the Small Business Act (as added by section 3) and 
subsections (e) through (k) of section 9 of the Small Business Act (as 
added by section 4) are repealed. 
SEC. 6. The Comptroller General shall, not more than five years 
after the date of enactment of this Act, transmit a report to the 
Senate and the House of Representatives on the implementation of, 
and nature of research conducted under this Act, including the 
judgments of the heads of Departments and agencies as to the effect 
of this Act on research programs. 
Approved July 22, 1982. 
Report to 
congressional 
committees. 
15 u s e 638. 
Report to 
Congress. 
15 u s e 638 note. 
LEGISLATIVE HISTORY—S. 881 (H.R. 4326): 
HOUSE REPORTS: No. 97-349, Pts. 1-7 accompanying H. R. 4326 (Comms. on Small 
Business; Energy and eommerce; Veterans' Affairs; Science and 
Technology; Foreign Affairs; Armed Services; and Permanent 
Select eommittee on Intelligence), respectively. 
SENATE REPORT No. 97-194 (Oomm. on Small Business). 
CONGRESSIONAL RECORD: 
Vol. 127 (1981): Dec. 7, 8, considered and passed Senate. 
Vol. 128 (1982): June 17, 22, 23, H.R. 4326 considered and passed House; passage 
vacated and S. 881, amended, passed in lieu. 
June 29, Senate concurred in House amendment. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS: 
Vol. 18, No. 29 (1982): July 22, Presidential statement.