GAO Issues Report on SBIR Program

When the Small Business Innovation Research (SBIR) Program was reauthorized in 1982, Congress mandated that the General Accounting Office (GAO) report on certain aspects of the program. GAO has now issued the final report, Federal Research: Observations on the Small Business Innovation Research Program, under that charge.

A major finding of the report was that agencies are using different interpretations of the extramural budget definition which may lead to incorrect calculations of the amount to be set aside for SBIR projects. Only two of the five agencies reviewed by GAO had conducted audits of their extramural research budgets to determine appropriate levels.

To ensure that SBIR funding levels are correct, GAO recommends that SBA provide additional guidance to the participating agencies on how to calculate their extramural budgets.

Other findings include:

• There was an increase in the number of multiple award winners from 10 companies in 1989 to 17 companies in FY 1996 (where multiple award winners was defined as Phase I award recipients that also received 15 or more Phase II awards in the preceding 5 years; however, multiple award recipients and non-multiple award recipients commercialized their ideas at almost identical rates.
• Only one percent of SBIR companies have finalized licensing agreements with companies or investors in foreign countries.
• Companies in California and Massachusetts received 39 percent of all SBIR awards in FY 1996 although every state received at least two awards.

The report presents findings in ten areas outlined by Congress. The GAO report (RCED-98-132) is available on the Internet at: www.gao.gov/new.items/rc98132.pdf