I authored an article published by Law360 discussing the recent reauthorization of the Small Business Innovation Research (SBIR) and Small Business Technology (STTR) programs. Touted as “America’s Seed Fund,” these programs seek to foster a healthy environment for small business startups to innovate and provide a path to private-sector commercialization of new technologies.
“While the programs have enjoyed a fair amount of success with notable companies like QUALCOMM Inc., 23andMe Inc. and Biogen Inc., getting their start as SBIR grant recipients, the programs have also been tested by exploitative SBIR mills; and concerns have grown about the programs’ potential facilitation of technology transfer to China,” I explained in the article. “Both programs were set to expire on September 30 absent congressional intervention. However, on the eve of that expiration date, the U.S. House of Representatives voted overwhelmingly to reauthorize the almost $4 billion program through 2025, with strings attached poised to reshape the program’s administration.”
The “strings attached” seek to remedy so-called “SBIR mills,” in which companies that have no intention to commercialize innovations win these contracts due to sophisticated proposal-writing capabilities and industry know-how.
The legislation also calls for establishing a due diligence program to vet small businesses applying for federal funding for national security risks. On a related note, it also added two mechanisms for the government to clawback federal funds (1) if a change in the business is determined to threaten national security or (2) if there is a material misstatement from the award recipient.