House and Senate lawmakers have agreed to reauthorize two small business research programs that have proven successful for more than three decades but were facing expiration at the end of the week.
House Small Business Committee Chairman Sam Graves (R-Mo.) on Monday night announced that members of both chambers have struck a deal on a defense bill amendment reauthorizing the Small Business Innovation Research program and the Small Business Technology Transfer program, which require government agencies to set aside a portion of their annual research budgets for contracts and grants to small businesses. Both programs are currently running on a temporary resolution that expires Friday.
“The SBIR and STTR programs are one of government’s most effective programs for spurring innovative ideas among the small business research and development community,” Graves said. “I’m glad that we’ve reached a deal to provide some much-needed certainty for the small firms who want to participate in this program.”
Last year, the SBIR program alone distributed approximately $2.5 billion in funding to small businesses, according to government data, compared to only $1.7 billion in early-stage investments made by the entire venture capital industry. Nevertheless, both programs have survived only through temporary extensions for the last three years.
The new amendment would not only reauthorize the program for six years, but also increase the small business allocation requirements from 2.5 to 3.2 percent for government agencies with annual research budgets of more than $100 million and from 0.3 percent to 0.45 percent for those with annual research budgets eclipsing $1 billion. Lawmakers also agreed to increase early-stage funding awards and allow small businesses majority-owned by venture capital firms to compete for a small portion of SBIR and SBTT contracts and grants.
“Because of this deal, businesses will have peace of mind for the next six years,” said Senator Mary Landrieu (D-La.), chair of the Senate Small Business and Entrepreneurship Committee. “The nation’s innovators will have more access to federal research dollars, and the process by which they get the funding will be more efficient because we cut down the time for final decisions and disbursements.”
The deal reflects a compromise between a bill proposed by the House earlier this year and an amendment approved by the Senate earlier this month, both of which aimed to reauthorize the programs but under vastly different terms and for varied numbers of years.
“Small business is the primary source of innovation and new technology development, and that’s been the truth for a long time,” said Jere Glover, executive director of the Small Business Technology Council and President Clinton’s former small business advocate. “These programs are really the only ones designed to make sure small business at least gets some part of the innovation budget.”
The amendment will be attached to the final National Defense Authorization Act, which sets the annual budget for the Department of Defense. Members of the House and Senate are currently ironing out differences between two competing versions of the bill, which is expected to be finalized and sent to the White House by week’s end.