Hearings on Reauthorizing SBIR/STTR Programs; House Bill Includes Venture Capital Financed Companies in SBIR Program

House and Senate subcommittees recently held hearings on the reauthorization of key programs that fund research and development efforts by small businesses. Under the Small Business Innovation Research (SBIR) program, agencies award Phase 1 contracts worth up to $100,000 to explore the technical feasibility of an idea, Phase II awards up to $750,000 to fund more R&D to assess the commercial potential of the technology whereas in Phase III, the technology moves into the commercial marketplace where the awardee receives no further agency funds. A companion program, the Small Business Technology Transfer (STTR) program differs from the SBIR principally by requiring collaboration between a small business and research laboratories. A recently introduced amendment by Russ Feingold (D-Wis) would reauthorize the programs through 2022 and would increase maximum awards to $300,000 for Phase I and $2.2 Million for Phase II.

Legislation passed the House July 10 that authorizes the SBIR program with double the amount of funding as the prior year and would make small business firms with venture capital financing eligible for SBIR funding. Under the current program, companies financed by venture capitalists are excluded from SBIR participation. Proponents of the measure stated the government should be encouraging small firms to raise capital not penalizing them so by attracting both venture capital and SBIR funds many small firms can enhance their ability to develop innovative products and create more good paying jobs.

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