Late Wednesday evening the Senate passed a bill reauthorizing the SBIR/STTR programs, clearing the biggest hurdle for reauthorization. This legislation moves the program forward to avoid a catastrophic program shut-down and is a significant victory for small business.
Introduced by Senate Small Business and Entrepreneurship Committee Chair Ben Cardin (D-Md.), S. 4900 will extend the programs for three years, moving the expiration date to Sept. 30, 2025. It also makes changes to the program that focus on research security, protecting SBIR technology from theft by China and other adversarial governments, and increased standards for Phase 1 to 2 transition and Commercialization for multiple award winners. The next step in the process will be the House taking up and passing the bill, which is expected to occur in the next week or so.
There will be an increase in reporting requirements and paperwork burden imposed by the research security provisions that firms will need to be aware of. In addition, firms with over 50 Phase 1 awards over the past five years will need to show a 50 percent transition rate to Phase 2. Firms with 50 Phase 2 awards over the past 10 years will need to show $250,000 in sales or investment for every Phase 2, and Firms with over 100 Phase 2 awards over the past 10 years will need to show $450,000 in sales or investment for every Phase 2. The consequence for missing these benchmarks will be a limit of 20 Phase 1 awards and Direct to Phase 2 awards per year.
NSBA and its Small Business Technology Council (SBTC) has been instrumental in helping to negotiate and move forward reauthorizing language to prevent a program shutdown. Stay tuned in the coming months for more detailed guidance and clarity for SBIR firms on what these changes mean, and how firms can come into compliance. SBTC will also work with SBA and the agencies to better understand how these changes will be implemented, and what they mean for small businesses.
NSBA and SBTC is closely monitoring progress of S. 4900, as well as maintaining all options for an SBIR/STTR reauthorization. Short of a permanent passage, extensions of SBIR/STTR are vital to ensuring opportunities for small business for research, technology, and beyond.
While this bill falls short of long-term priorities for NSBA and SBTC—it includes a three-year reauthorization vs. a permanent solution and institutes new burdensome reporting requirements—it takes important and necessary steps forward to ensure the near-term stability and predictability of the program.
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