SBIR Legislation Signed Into Law PDF Print E-mail
Thursday, January 19 2012

President Signs SBIR Reauthorization Bill-Allows VC Participation for 5 years:

On January 2, after six years of heated Congressional debate, President Obama signed into law the SBIR/STTR Reauthorization bill which allows majority-VC-backed companies to participate in the SBIR program and directs the Small Business Administration (SBA) to revise its affiliation rules to ensure majority VC-backed companies will be qualified to participate in the program. This bill was included in the National Defense Authorization bill.

Senator Landrieu (D-LA), Chair, Senate Small Business Committee and Representative Graves (R-MO), Chair, House Small Business Committee deserve credit for hammering out a compromise and getting this bill over the finish line. SBA now must publish draft rules within 90 days for public comment defining several specifics on how they plan to implement the new law, including specifics on defining majority VC-backed companies. NVCA will work closely with SBA on the implementation of the new law and will comment on SBA’s draft rules to ensure SBA meets the new law’s stated goals.

The following are the key provisions included in this final SBIR package:

  • Reauthorizes the SBIR/STTR program for six years. Senator McCain (R-AZ) insisted on an amendment that allows majority VC-backed companies to participate in the program only for 5 years;
  • Increases the SBIR allocation from 2.5 percent to 3.2 percent;
  • Increases majority VC-backed company participation up to 25 percent for NIH, DOD, and NSF, and up to 15 percent for other agencies;
  • Increases both Phase I and Phase II award levels, which have not been raised since 1982. The award guidelines are increased from $100K to $150K for Phase I and from $750K to $1M for Phase II, allowing for an additional Phase II on the same project;
  • Allows the agencies to use 3 percent of SBIR funds to administer SBIR programs and increase oversight;
  • Introduces performance-based standards to encourage companies to focus on commercialization through Phase III of the program, and;
  • Gives SBA more power to track who is receiving the awards by requiring the agencies to submit the number of VC-backed vs. non VC-backed companies receiving the awards.

 

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