Congress has reauthorized the Small Business Innovation Research and Small Business Technology Transfer programs for another six years.

Enacted by Congress in 1982, the SBIR program is the largest federal research and development program for small businesses and one of the largest examples of U.S. public-private partnerships. The program allows small businesses to compete for a portion of federal research dollars in order to help the agencies meet their many missions.

By including small businesses in the nation’s R&D efforts, SBIR grants and contracts are intended to stimulate innovative solutions to help the agencies meet specific research and development needs, and move the ideas from lab to market, whether for the government or commercial purposes.

The Small Business Technology Transfer Program, STTR, is an important small business program that expands funding opportunities in the federal innovation research and development arena. Central to the program is expansion of the public/private sector partnership to include the joint venture opportunities for small business and the nation's premier nonprofit research institutions. It aims to foster the innovation necessary to meet the nation's scientific and technological challenges in the 21st century.

Prior to the reauthorization of the programs that Congress approved on December 13 as part of the National Defense Authorization Act conference report, the SBIR program survived through 14 temporary extensions since September 2008 and the STTR program was extended 11 times since September 2009.

“Because of this deal, businesses will have peace of mind for the next six years,” said Sen. Mary Landrieu, D-La., who chairs Senate Committee on Small Business and Entrepreneurship. “The nation’s innovators will have more access to federal research dollars, and the process by which they get the funding will be more efficient because we cut down the time for final decisions and disbursements.”

During the Senate’s consideration of the National Defense Authorization Act, nearly 400 amendments were considered and only eight of them received votes. The amendment to reauthorize SBIR/STTR was one of those eight, and had such strong support in the Senate that it was unanimously agreed to by voice vote.

Key provisions in the conference report include reauthorizing SBIR and STTR for six years, increasing the SBIR allocation from 2.5 percent to 3.2 percent over several years, increasing the STTR allocation from 0.3 percent to 0.45 percent over six years, and increasing venture capital participation to 25 percent for the National Institutes of Health, the Department of Energy, and the National Science Foundation, and 15 percent for other agencies.

The law also shortens the time for final decisions to 90 days, and shortens the amount of time between decision and release of funds, with flexibility for the NIH. It also allows the agencies to use 3 percent of SBIR funds to administer SBIR programs, increase oversight, and provide outreach and application assistance to address shortcomings in the low participation of women, minorities and states with few awards.

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