SBA Changes Rules for SBIR

Friday's issue of the Idaho SBIR Competition Newsletter brought to our attention two announcements from the SBA regarding the SBIR Program. Proposed changes for the program were included in the Dec. 3 online issue of the Federal Register. We reprint an extended excerpt of the text from the Idaho SBIR Competition Newsletter verbatim below, with our great appreciation for the work of Dr. Chris Busch, consultant to the University of Idaho EPSCoR Program, and Dr. Jean'ne Shreeve, Idaho EPSCoR/IDeA project director.

The SBA rule change published today (3 Dec 2004) in the Federal Register establishes the following requirement for an SBIR awardee:

It must be a for-profit business concern that is at least 51% owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the United States (as the regulations currently require); or it must be a for-profit business concern that is at least 51% owned and controlled by another for-profit business concern that is at least 51% owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the United States.

The first part of the rule above is the present rule. The second part (italicized) reflects the changes in the rule. The rule is to take effect 3 Jan 2005.

As a result of the rule change, subsidiaries may now be eligible for SBIR competition. Previously, all subsidiaries were ineligible. Subsidiaries of parent small businesses that are owned by SBIR-eligible venture capital firms also would be eligible. For venture capital firms to be SBIR-eligible, they must satisfy the first part of the rule cited above.

Comments Sought on VC Eligibility SBA also published today (3 Dec 2004) in the Federal Register an “Advance notice of proposed rulemaking” that seeks comments on SBIR eligibility for businesses majority-owned by venture capital companies. Specifically, the SBA is seeking comments on whether it should provide an exclusion from affiliation with venture capital companies in determining small business eligibility for the SBIR Program.

Comments must be received by SBA by 1 Feb 2005.

This announcement also is available on the Federal Register website: http://www.access.gpo.gov/su_docs/fedreg/a041203c.html

Comments identified by RIN 3245-ZA02 may be submitted by any of the following methods: Federal eRulemaking Web Portal: http://www.regulations.gov. Follow the instructions for submitting comments. E-mail or FAX (202-205-6930): Include RIN 3245-ZA02 in the subject line of the message. restructure.sizestandandards@sba.gov. Mail or Hand Courier: Gary M. Jackson, Assistant Administrator for Size Standards 409 Third Street, SW. Washington, DC 20416.

SSTI encourages all interested parties to comment.