Committees pass defense authorization bills affecting small business policy

The U.S. House and Senate Armed Services Committees recently passed their versions of the FY 2018 National Defense Authorization Act (NDAA). The legislation includes provisions for federal labs, SBIR and SBA technical assistance programs. These portions of the bills are currently very different between the chambers, and, if passed in their current forms, the final bill could address a wide range of policies affecting small business and innovation.

The Senate NDAA has three provisions particularly of interest for small business and innovation advocates:

• Pilot Program for Streamlined Technology Transition from the SBIR and STTR Programs —directs the Defense secretary to establish a program enabling the department to sign multiple award contracts with businesses that have completed a Phase I with Defense and gives the secretary the option of waiving competition requirements for these contracts;
• Pilot Program on Strengthening Manufacturing in Defense Industrial Base —  directs the Defense secretary to implement a program boosting production of emerging technologies through small- and mid-sized manufacturers by conducting activities that may include contracts or grants for assistance, purchase orders or commitments, direct loans or guarantees for businesses and awards to third parties to work with the manufacturers; and,
• Codification and Enhancement of Authorities to Provide Funds for Defense Laboratories — would create a mechanism for lab directors to spend 2-4 percent of funds on projects that may include technology transition, as well as research, lab infrastructure and workforce.

The Senate bill would also expand HUBZones and provides demonstration- and innovation-related authorizations for specific needs, including “directed energy” weapons and launch technologies.

The House NDAA, which does not include any of the Senate provisions highlighted above, devotes substantial attention to U.S. Small Business Administration programs, including the following provisions:

• Office of Women’s Business Ownership — makes numerous changes to the application and oversight of the program, including adding an accreditation process and setting grants to $185,000 with allowable adjustments for inflation;
• Use of Authorized Entrepreneurial Development Programs — directs the SBA to use programs only to deliver entrepreneurial development services and education, cluster development and maintenance or business training;
• Data Collection — the SBA administrator is directed to establish a working group to improve data collection on program impacts; and,
• SCORE Program — reauthorizes the program through FY 2019, directs SBA to implement online mentoring and to provide a strategic plan for the next five years.

The House bill also creates an office and director of IP that will employ a “cadre of IP experts” to develop and coordinate policies across Defense.

The next step for each bill is to pass its respective chamber. Once both the House and Senate have passed an NDAA bill, the differences between the legislation suggest that a conference committee will reconcile the two versions and require approval from both chambers before heading to the president.