Congressional inaction threatens SBIR program

The federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, providing nearly $4 billion in technology research and development funding, expire — in just six weeks — on Sept. 30. Unlike many federal programs that regularly operate beyond the end of their authorization, there is no direct SBIR appropriation that will ensure the program continues as-is without congressional action. Instead, SBIR would be on an agency-by-agency basis. The Department of Defense already announced it “cannot continue funding new or ongoing” projects without reauthorization, and the Federal Laboratory Consortium for Technology Transfer (FLC) has warned that even the agencies that carry on may have challenges with SBIR data rights (a non-disclosure obligation on the federal government for certain information developed under an SBIR/STTR award) and post-award (i.e., Phase III) purchases of SBIR-developed technologies by federal agencies.

To date, the House has included SBIR/STTR reauthorization in two bills: the COMPETES Act and its annual defense authorization. Unfortunately, the COMPETES bill is not likely to advance, as it largely overlapped with the CHIPS and Science Act, which the House and Senate recently approved, and the defense authorization is unlikely to proceed before Sept. 30. Additionally, the Senate’s willingness to include SBIR reauthorization in the defense authorization act is not yet evident.

A major sticking point for reauthorization has been concerns about companies that receive multiple awards, a topic that the Senate and House small business committees have been negotiating for several months.

Given the past success of SBIR/STTR and rapidly-approaching deadline to continue the programs, SSTI is calling again on Congress to act as quickly as possible. See our latest letter at the end of this article. 

Similarly-minded groups are encouraged to share SSTI’s letter, or their own messages in favor of SBIR, with their delegations. Contact Jason Rittenberg [rittenberg@ssti.org] for additional information.

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Dear Speaker Pelosi, Leader McCarthy, Leader Schumer, and Leader McConnell:

SSTI, on behalf of our members, is writing to urge Congress to reauthorize the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs before they expire on September 30 of this year. This request echoes an appeal signed by 100+ organizations in February.[1]

Should Congress allow SBIR and STTR to lapse, our country will lose its most substantial investments in translating research into life-saving therapeutics, national security technologies, energy-efficient materials and thousands of other important products and services.

The impact of SBIR/STTR is difficult to overstate. More than 300,000 companies have benefitted from the program since its creation,[2] including some, like 23andme, Ginkgo Bioworks, iRobot, and Qualcomm, that went on to become household names. Agency-specific studies have demonstrated impacts including $28 billion in awardee sales to the U.S. Department of Defense[3] and that one of every six drugs that made a “significant” advance over existing medicine in the past 25 years were from a National Institutes of Health[4] SBIR/STTR awardee.

Given the limited time remaining before the programs lapse, we ask Congress to pass a straightforward reauthorization that extends the SBIR/STTR programs and related authorities for at least one year.

The House has included SBIR/STTR reauthorization language in its COMPETES Act and National Defense Authorization Act, and we thank the Members for this action. Should these bills not become law before the end of the current fiscal year, we request that Congress also include the reauthorization in any appropriations or other legislation that will pass before September 30th.

We recognize that some Members of Congress oppose extending SBIR and STTR without restrictions on the ability of participating agencies to make awards to companies that have previously won awards through the program. We sympathize with this concern, as we recognize that new, innovation-focused companies are often the strongest drivers of employment growth in a region.[5] However, we also recognize that previous research into SBIR/STTR has not identified a clear concern with the outcomes of multiple award winners, and that the agencies that are most likely to work with repeat companies are also the agencies that use the programs to advance their own mission-based technology needs (including the U.S. Department of Defense and U.S. Department of Health and Human Services). Given the diverging findings in existing research on this topic, Congress could advance this discussion by supporting a robust evaluation of the technological and commercial successes of multiple award winners compared to first-time awardees.

The bottom line is that we do not believe the continued success of SBIR/STTR in supporting technology development by all small businesses should be held back due to concerns about multiple award winners.

Once SBIR/STTR’s existence into the next fiscal year is ensured, we welcome a conversation about improvements to the programs.

Thank you for your attention to this urgent issue. We stand ready to work with you to reauthorize the important and successful SBIR and STTR programs as soon as possible.