The Small Business Innovation Development Act of 1982 established the SBIR program and identified four program goals: technological innovation, commercialization of the research results, the use of small businesses to meet agencies’ R&D needs, and participation in federal R&D by minorities and disadvantaged persons. The legislation provided for a competitive three-phased program: phase I to determine the technical and scientific merit and feasibility of a proposed research idea; phase II to further develop the idea, taking into account its commercial potential; and phase III to commercialize the resulting product or process with private or federal investment but no additional SBIR funding. Under the SBIR program provisions, federal agencies that have external R&D budgets of $100 million or more are required to use 2.5 percent of these budgets to establish and operate an SBIR program. SBA oversees and coordinates the efforts of the eleven agencies currently participating in the program. In this capacity, SBA coordinates the participating agencies’ schedules to announce opportunities for firms to apply for awards, called a solicitation, and provides access to these solicitations through its Web site. As part of its oversight effort, SBA collects SBIR data from the participating agencies, aggregates the data, and uses the data to, among other things, monitor the program and report annually to the Congress. In reauthorizing the SBIR program in 1992, the Congress stated its intention to expand and improve the program by emphasizing its goal of increasing private sector commercialization, increasing participation in federal R&D by small businesses, and improving the government’s dissemination of program-related information. One of the new provisions under the 1992 legislation requires agencies, when evaluating phase II proposals, to consider their commercial potential, including the recipients’ experiences commercializing the results from previous SBIR awards, commitments accompanying the proposals for developmental funding from sources other than the SBIR program, and other factors. The SBIR program was again reauthorized in 2000 by the Small Business Innovation Research Program Reauthorization Act of 2000. The 2000 legislation directed SBA and participating agencies to, among other things, expand the scope of publicly available information on specific awards and to annually report data on their SBIR programs to SBA. The act required that SBIR phase II award recipients be requested to voluntarily provide information to the agencies describing the outputs and outcomes of their SBIR award. The act also required SBA to establish, by mid-2001, a searchable and up-to-date electronic database available for public use, and a restricted government-use database. To accomplish this mandate, SBA envisioned expanding the electronic database, known as Tech-Net, that it had developed in the late 1990s, into two sections: a public-use section and a restricted government-use section. The public-use section of the Tech- Net database would provide access to nearly all of the statutorily-required award information for SBIR awards gathered by the agencies. The public- use section was intended to be an electronic gateway of technology information and resources for researchers, scientists, and government officials who are seeking information on potential small business partners, contractors, or leading edge technology research. The government-use section would be solely used for program evaluation purposes accessible only to government agencies and other authorized users, and would contain commercialization data voluntarily supplied by SBIR recipients upon completion of their phase II SBIR funding agreement, such as revenue from the sale of new products or services resulting from the research undertaken with the award. In addition, applicants for phase II awards would be required to update information on the commercialization success of any prior SBIR awards they had received. Currently, SBA has created and is maintaining the public-use section of the Tech-Net database, which is available on the Internet to the general public. While federal agencies participating in the SBIR program submit a wide range of descriptive award information to SBA annually, these agencies are not consistently providing all of the required information. As outlined in SBA’s guidance, each year SBIR participating agencies are required to collect and maintain information from recipients and provide it to SBA so that it can be included in the Tech-Net database. Specifically, participating agencies are required to provide over 40 data elements for each SBIR award they make. These data include award-specific information, such as the date and amount of the award, an abstract of the project funded by the award, and a unique tracking number for each award. Participating agencies are also required to provide data about the award recipient, such as gender and socio-economic status, and information about the type of firms that received the awards, such as number of employees and geographic location. Much of the data collected by participating agencies are provided by the SBIR applicants at the time they apply for an award. Agencies provide additional information, such as the grant/contract number and the dollar amount of the award, after the award is made. For the most part, all of the eight agencies we reviewed provided the majority of the SBIR award data requested by SBA, including the program identification number; company name, address, and contact information; award year and amount; a unique tracking number that will stay with the award through both phase I and phase II; and the title and abstract of the project funded. However, we also determined that some of the agencies are not providing the full range of information required by SBA. For example, two of the eight agencies we reviewed had not provided SBA data on the gender or socio-economic status of SBIR award recipients in 2004 and 2005. Similarly, in 2005, five of the eight agencies failed to provide data on the number of employees working at the firms that received the awards. As a result, SBA does not have information on the number of employees at SBIR awardee firms for about one-third of all the awards reported by these agencies in 2004 and 2005. SBA officials acknowledged that agencies do not routinely provide all of the information requested because either they do not capture the information in their agency databases or they are not requesting the information from SBIR applicants. Officials at the participating agencies also cited other reasons for the incomplete data they provided to SBA. For example, NIH officials stated that for the past several years, the SBA Tech- Net annual reporting requirements have changed each year. At the end of calendar year 2003, SBA changed the field description from “minority” to “socially and economically disadvantaged small business.” According to NIH officials, because the SBIR information is captured by the agency at the time the application is submitted/received, there is a lag in time between when application data is input into the NIH database and when the agency receives new SBA data field requirements. According to these officials, responding to SBA’s changes in field names presents significant challenges to NIH for collecting the data needed to complete the Tech-Net reports, especially if the requirements change annually. As a result, these officials stated that complying with the changing requirements necessitates significant NIH resources and efforts to research and identify the information needed for the new data fields, not all of which can be provided. In commenting on a draft of this report, SBA stated that it has only requested minor clarifications of data requirements and has not made frequent changes as stated by the agencies. SBA believes that this may have been caused by lack of clear communication to the agencies. The agencies also noted that data for certain Tech-Net fields will be absent from their reports to SBA if the data fields do not exist in the NIH application or in its awards database. Similarly, USDA officials stated that although they try to keep their records as up-to-date as possible, problems occur when company or contact information changes and the SBIR recipient fails to provide updated information to the agency, such as the e- mail address for the central contact person. Additionally, like NIH, USDA officials stated that certain information requested by SBA is not collected by their agency. For example, as long as SBIR applicants have certified that they meet the criterion of being a small business (under 500 employees), they do not ask for nor do they record information on the number of employees in the firm. Participating agencies are providing some data that do not comply with SBA’s formatting guidance, and while some of these inconsistencies are corrected by SBA’s quality assurance processes, others are not. As a result, some data elements in the Tech-Net database may be inconsistent or inaccurate thereby, compromising the value of these data for program evaluation. SBA’s quality assurance efforts focus on obtaining complete and accurate data for those fields essential to tracking specific awards, such as the tracking number and award amount, rather than on those fields that contain demographic information about the award recipient. Because the data contained in the public-use section of Tech-Net will be incorporated into the government-use section of the database, inaccurate data in one section of the database will be replicated in the other, and these inaccurate data will limit evaluations of the SBIR program. Both SBA and agency officials acknowledge that SBA has worked with participating agencies since 2000 to help ensure greater consistency in the formatting of the SBIR award data reported by agencies each year. To assist agencies in formatting the data and to minimize the number of inconsistencies in the data reported to SBA, SBA has taken a number of steps to improve the data formatting process. Specifically, SBA provided all of the participating agencies specific guidance on its requirements for the data, including its preferred program application for submitting the data, the length of each data field, and whether data should be entered as numbers, characters, or a mix of both. SBA has also included discussions of the Tech-Net database as an agenda item at its quarterly meetings with SBIR program managers from each of the participating agencies. Additionally, SBA developed a reporting template for agencies to use that includes the required data fields and instructions for appropriate data entry.