15 U.s.c. 638

15 U.S.C. 638.htm

The Small Business Innovative Research (SBIR) and Small Business Technology Transfer (STTR) Forms

15 U.S.C. 638

OMB: 1640-0009

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[Laws in effect as of January 20, 2004]
[Document not affected by Public Laws enacted between
  January 20, 2004 and December 23, 2004]
[CITE: 15USC638]

 
                      TITLE 15--COMMERCE AND TRADE
 
                   CHAPTER 14A--AID TO SMALL BUSINESS
 
Sec. 638. Research and development


(a) Declaration of policy

    Research and development are major factors in the growth and 
progress of industry and the national economy. The expense of carrying 
on research and development programs is beyond the means of many small-
business concerns, and such concerns are handicapped in obtaining the 
benefits of research and development programs conducted at Government 
expense. These small-business concerns are thereby placed at a 
competitive disadvantage. This weakens the competitive free enterprise 
system and prevents the orderly development of the national economy. It 
is the policy of the Congress that assistance be given to small-business 
concerns to enable them to undertake and to obtain the benefits of 
research and development in order to maintain and strengthen the 
competitive free enterprise system and the national economy.

(b) Assistance to small-business concerns

    It shall be the duty of the Administration, and it is empowered--
        (1) to assist small-business concerns to obtain Government 
    contracts for research and development;
        (2) to assist small-business concerns to obtain the benefits of 
    research and development performed under Government contracts or at 
    Government expense;
        (3) to provide technical assistance to small-business concerns 
    to accomplish the purposes of this section; and \1\
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        (4) to develop and maintain a source file and an information 
    program to assure each qualified and interested small business 
    concern the opportunity to participate in Federal agency small 
    business innovation research programs and small business technology 
    transfer programs;
        (5) to coordinate with participating agencies a schedule for 
    release of SBIR and STTR solicitations, and to prepare a master 
    release schedule so as to maximize small businesses' opportunities 
    to respond to solicitations;
        (6) to independently survey and monitor the operation of SBIR 
    and STTR programs within participating Federal agencies; and
        (7) to report not less than annually to the Committee on Small 
    Business of the Senate, and to the Committee on Science and the 
    Committee on Small Business of the House of Representatives, on the 
    SBIR and STTR programs of the Federal agencies and the 
    Administration's information and monitoring efforts related to the 
    SBIR and STTR programs, including the data on output and outcomes 
    collected pursuant to subsections (g)(10), (o)(9), and (o)(15) of 
    this section, the number of proposals received from, and the number 
    and total amount of awards to, HUBZone small business concerns under 
    each of the SBIR and STTR programs, and a description of the extent 
    to which Federal agencies are providing in a timely manner 
    information needed to maintain the database described in subsection 
    (k) of this section.

(c) Consultation and cooperation with Government agencies; studies and 
        recommendations

    The Administration is authorized to consult and cooperate with all 
Government agencies and to make studies and recommendations to such 
agencies, and such agencies are authorized and directed to cooperate 
with the Administration in order to carry out and to accomplish the 
purposes of this section.

(d) Joint programs; approval of agreements; withdrawal of approval; 
        publication in Federal Register

    (1) The Administrator is authorized to consult with representatives 
of small-business concerns with a view to assisting and encouraging such 
firms to undertake joint programs for research and development carried 
out through such corporate or other mechanism as may be most appropriate 
for the purpose. Such joint programs may, among other things, include 
the following purposes:
        (A) to construct, acquire, or establish laboratories and other 
    facilities for the conduct of research;
        (B) to undertake and utilize applied research;
        (C) to collect research information related to a particular 
    industry and disseminate it to participating members;
        (D) to conduct applied research on a protected, proprietary, and 
    contractual basis with member or nonmember firms, Government 
    agencies, and others;
        (E) to prosecute applications for patents and render patent 
    services for participating members; and
        (F) to negotiate and grant licenses under patents held under the 
    joint program, and to establish corporations designed to exploit 
    particular patents obtained by it.

    (2) The Administrator may, after consultation with the Attorney 
General and the Chairman of the Federal Trade Commission, and with the 
prior written approval of the Attorney General, approve any agreement 
between small-business firms providing for a joint program of research 
and development, if the Administrator finds that the joint program 
proposed will maintain and strengthen the free enterprise system and the 
economy of the Nation. The Administrator or the Attorney General may at 
any time withdraw his approval of the agreement and the joint program of 
research and development covered thereby, if he finds that the agreement 
or the joint program carried on under it is no longer in the best 
interests of the competitive free enterprise system and the economy of 
the Nation. A copy of the statement of any such finding and approval 
intended to be within the coverage of this subsection, and a copy of any 
modification or withdrawal of approval, shall be published in the 
Federal Register. The authority conferred by this subsection on the 
Administrator shall not be delegated by him.
    (3) No act or omission to act pursuant to and within the scope of 
any joint program for research and development, under an agreement 
approved by the Administrator under this subsection, shall be construed 
to be within the prohibitions of the antitrust laws or the Federal Trade 
Commission Act [15 U.S.C. 41 et seq.]. Upon publication in the Federal 
Register of the notice of withdrawal of his approval of the agreement 
granted under this subsection, either by the Administrator or by the 
Attorney General, the provisions of this subsection shall not apply to 
any subsequent act or omission to act by reason of such agreement or 
approval.

(e) Definitions

    For the purpose of this section--
        (1) the term ``extramural budget'' means the sum of the total 
    obligations minus amounts obligated for such activities by employees 
    of the agency in or through Government-owned, Government-operated 
    facilities, except that for the Department of Energy it shall not 
    include amounts obligated for atomic energy defense programs solely 
    for weapons activities or for naval reactor programs, and except 
    that for the Agency for International Development it shall not 
    include amounts obligated solely for general institutional support 
    of international research centers or for grants to foreign 
    countries;
        (2) the term ``Federal agency'' means an executive agency as 
    defined in section 105 of title 5 or a military department as 
    defined in section 102 of such title, except that it does not 
    include any agency within the Intelligence Community (as the term is 
    defined in section 3.4(f) of Executive Order 12333 or its successor 
    orders);
        (3) the term ``funding agreement'' means any contract, grant, or 
    cooperative agreement entered into between any Federal agency and 
    any small business for the performance of experimental, 
    developmental, or research work funded in whole or in part by the 
    Federal Government;
        (4) the term ``Small Business Innovation Research Program'' or 
    ``SBIR'' means a program under which a portion of a Federal agency's 
    research or research and development effort is reserved for award to 
    small business concerns through a uniform process having--
            (A) a first phase for determining, insofar as possible, the 
        scientific and technical merit and feasibility of ideas that 
        appear to have commercial potential, as described in 
        subparagraph (B), submitted pursuant to SBIR program 
        solicitations;
            (B) a second phase, to further develop proposals which meet 
        particular program needs, in which awards shall be made based on 
        the scientific and technical merit and feasibility of the 
        proposals, as evidenced by the first phase, considering, among 
        other things, the proposal's commercial potential, as evidenced 
        by--
                (i) the small business concern's record of successfully 
            commercializing SBIR or other research;
                (ii) the existence of second phase funding commitments 
            from private sector or non-SBIR funding sources;
                (iii) the existence of third phase, follow-on 
            commitments for the subject of the research; and
                (iv) the presence of other indicators of the commercial 
            potential of the idea; and

            (C) where appropriate, a third phase--
                (i) in which commercial applications of SBIR-funded 
            research or research and development are funded by non-
            Federal sources of capital or, for products or services 
            intended for use by the Federal Government, by follow-on 
            non-SBIR Federal funding awards; or
                (ii) for which awards from non-SBIR Federal funding 
            sources are used for the continuation of research or 
            research and development that has been competitively 
            selected using peer review or scientific review criteria;

        (5) the term ``research'' or ``research and development'' means 
    any activity which is (A) a systematic, intensive study directed 
    toward greater knowledge or understanding of the subject studied; 
    (B) a systematic study directed specifically toward applying new 
    knowledge to meet a recognized need; or (C) a systematic application 
    of knowledge toward the production of useful materials, devices, and 
    systems or methods, including design, development, and improvement 
    of prototypes and new processes to meet specific requirements;
        (6) the term ``Small Business Technology Transfer Program'' or 
    ``STTR'' means a program under which a portion of a Federal agency's 
    extramural research or research and development effort is reserved 
    for award to small business concerns for cooperative research and 
    development through a uniform process having--
            (A) a first phase, to determine, to the extent possible, the 
        scientific, technical, and commercial merit and feasibility of 
        ideas submitted pursuant to STTR program solicitations;
            (B) a second phase, to further develop proposed ideas to 
        meet particular program needs, in which awards shall be made 
        based on the scientific, technical, and commercial merit and 
        feasibility of the idea, as evidenced by the first phase and by 
        other relevant information; and
            (C) where appropriate, a third phase--
                (i) in which commercial applications of STTR-funded 
            research or research and development are funded by non-
            Federal sources of capital or, for products or services 
            intended for use by the Federal Government, by follow-on 
            non-STTR Federal funding awards; and
                (ii) for which awards from non-STTR Federal funding 
            sources are used for the continuation of research or 
            research and development that has been competitively 
            selected using peer review or scientific review criteria;

        (7) the term ``cooperative research and development'' means 
    research or research and development conducted jointly by a small 
    business concern and a research institution in which not less than 
    40 percent of the work is performed by the small business concern, 
    and not less than 30 percent of the work is performed by the 
    research institution; and
        (8) the term ``research institution'' means a nonprofit 
    institution, as defined in section 3703(5) of this title, and 
    includes federally funded research and development centers, as 
    identified by the National Scientific Foundation in accordance with 
    the governmentwide Federal Acquisition Regulation issued in 
    accordance with section 421(c)(1) \2\ of title 41 (or any successor 
    regulation thereto).
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(f) Federal agency expenditures for SBIR program

                  (1) Required expenditure amounts

        Each Federal agency which has an extramural budget for research 
    or research and development in excess of $100,000,000 for fiscal 
    year 1992, or any fiscal year thereafter, shall expend with small 
    business concerns--
            (A) not less than 1.5 percent of such budget in each of 
        fiscal years 1993 and 1994;
            (B) not less than 2.0 percent of such budget in each of 
        fiscal years 1995 and 1996; and
            (C) not less than 2.5 percent of such budget in each fiscal 
        year thereafter,

    specifically in connection with SBIR programs which meet the 
    requirements of this section, policy directives, and regulations 
    issued under this section.

                           (2) Limitations

        A Federal agency shall not--
            (A) use any of its SBIR budget established pursuant to 
        paragraph (1) for the purpose of funding administrative costs of 
        the program, including costs associated with salaries and 
        expenses; or
            (B) make available for the purpose of meeting the 
        requirements of paragraph (1) an amount of its extramural budget 
        for basic research which exceeds the percentages specified in 
        paragraph (1).

             (3) Exclusion of certain funding agreements

        Funding agreements with small business concerns for research or 
    research and development which result from competitive or single 
    source selections other than an SBIR program shall not be considered 
    to meet any portion of the percentage requirements of paragraph (1).

(g) Administration of small business innovation research programs by 
        Federal agencies required to establish such programs

    Each Federal agency required by subsection (f) of this section to 
establish a small business innovation research program shall, in 
accordance with this chapter and regulations issued hereunder--
        (1) unilaterally determine categories of projects to be in its 
    SBIR program;
        (2) issue small business innovation research solicitations in 
    accordance with a schedule determined cooperatively with the Small 
    Business Administration;
        (3) unilaterally determine research topics within the agency's 
    SBIR solicitations, giving special consideration to broad research 
    topics and to topics that further 1 or more critical technologies, 
    as identified by--
            (A) the National Critical Technologies Panel (or its 
        successor) in the 1991 report required under section 6683 \3\ of 
        title 42, and in subsequent reports issued under that authority; 
        or
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            (B) the Secretary of Defense, in the 1992 report issued in 
        accordance with section 2522 \3\ of title 10, and in subsequent 
        reports issued under that authority;

        (4) unilaterally receive and evaluate proposals resulting from 
    SBIR proposals;
        (5) subject to subsection (l) of this section, unilaterally 
    select awardees for its SBIR funding agreements and inform each 
    awardee under such an agreement, to the extent possible, of the 
    expenses of the awardee that will be allowable under the funding 
    agreement;
        (6) administer its own SBIR funding agreements (or delegate such 
    administration to another agency);
        (7) make payments to recipients of SBIR funding agreements on 
    the basis of progress toward or completion of the funding agreement 
    requirements and, in all cases, make payment to recipients under 
    such agreements in full, subject to audit, on or before the last day 
    of the 12-month period beginning on the date of completion of such 
    requirements;
        (8) make an annual report on the SBIR program to the Small 
    Business Administration and the Office of Science and Technology 
    Policy;
        (9) include, as part of its annual performance plan as required 
    by subsections (a) and (b) of section 1115 of title 31, a section on 
    its SBIR program, and shall submit such section to the Committee on 
    Small Business of the Senate, and the Committee on Science and the 
    Committee on Small Business of the House of Representatives; and
        (10) collect, and maintain in a common format in accordance with 
    subsection (v) of this section, such information from awardees as is 
    necessary to assess the SBIR program, including information 
    necessary to maintain the database described in subsection (k) of 
    this section.

(h) Establishment of goals for funding agreements for research or 
        research and development to small business concerns by agencies 
        having budgets for research and development

    In addition to the requirements of subsection (f) of this section, 
each Federal agency which has a budget for research or research and 
development in excess of $20,000,000 for any fiscal year beginning with 
fiscal year 1983 or subsequent fiscal year shall establish goals 
specifically for funding agreements for research or research and 
development to small business concerns, and no goal established under 
this subsection shall be less than the percentage of the agency's 
research or research and development budget expended under funding 
agreements with small business concerns in the immediately preceding 
fiscal year.

(i) Annual reporting

                           (1) In general

        Each Federal agency required by this section to have an SBIR 
    program or to establish goals shall report annually to the Small 
    Business Administration the number of awards pursuant to grants, 
    contracts, or cooperative agreements over $10,000 in amount and the 
    dollar value of all such awards, identifying SBIR awards and 
    comparing the number and amount of such awards with awards to other 
    than small business concerns.

                (2) Calculation of extramural budget

        (A) Methodology

            Not later than 4 months after the date of the enactment of 
        each appropriations Act for a Federal agency required by this 
        section to have an SBIR program, the Federal agency shall submit 
        to the Administrator a report, which shall include a description 
        of the methodology used for calculating the amount of the 
        extramural budget of that Federal agency.

        (B) Administrator's analysis

            The Administrator shall include an analysis of the 
        methodology received from each Federal agency referred to in 
        subparagraph (A) in the report required by subsection (b)(7) of 
        this section.

(j) Small Business Administration policy directives for the general 
        conduct of small business innovation research programs

                        (1) Policy directives

        The Small Business Administration, after consultation with the 
    Administrator of the Office of Federal Procurement Policy, the 
    Director of the Office of Science and Technology Policy, and the 
    Intergovernmental Affairs Division of the Office of Management and 
    Budget, shall, within one hundred and twenty days of July 22, 1982, 
    issue policy directives for the general conduct of the SBIR programs 
    within the Federal Government, including providing for--
            (A) simplified, standardized, and timely SBIR solicitations;
            (B) a simplified, standardized funding process which 
        provides for (i) the timely receipt and review of proposals; 
        (ii) outside peer review for at least phase two proposals, if 
        appropriate; (iii) protection of proprietary information 
        provided in proposals; (iv) selection of awardees; (v) retention 
        of rights in data generated in the performance of the contract 
        by the small business concern; (vi) transfer of title to 
        property provided by the agency to the small business concern if 
        such a transfer would be more cost effective than recovery of 
        the property by the agency; (vii) cost sharing; and (viii) cost 
        principles and payment schedules;
            (C) exemptions from the regulations under paragraph (2) \4\ 
        if national security or intelligence functions clearly would be 
        jeopardized;
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    \4\ So in original. Probably should be ``subparagraph (B)''.
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            (D) minimizing regulatory burden associated with 
        participation in the SBIR program for the small business concern 
        which will stimulate the cost-effective conduct of Federal 
        research and development and the likelihood of commercialization 
        of the results of research and development conducted under the 
        SBIR program;
            (E) simplified, standardized, and timely annual report on 
        the SBIR program to the Small Business Administration and the 
        Office of Science and Technology Policy;
            (F) standardized and orderly withdrawal from program 
        participation by an agency having a SBIR program; at the 
        discretion of the Administration, such directives may require a 
        phased withdrawal over a period of time sufficient in duration 
        to minimize any adverse impact on small business concerns; and
            (G) the voluntary participation in a SBIR program by a 
        Federal agency not required to establish such a program pursuant 
        to subsection (f) of this section.

                          (2) Modifications

        Not later than 90 days after October 28, 1992, the Administrator 
    shall modify the policy directives issued pursuant to this 
    subsection to provide for--
            (A) retention by a small business concern of the rights to 
        data generated by the concern in the performance of an SBIR 
        award for a period of not less than 4 years;
            (B) continued use by a small business concern participating 
        in the third phase of the SBIR program, as a directed bailment, 
        of any property transferred by a Federal agency to the small 
        business concern in the second phase of an SBIR program for a 
        period of not less than 2 years, beginning on the initial date 
        of the concern's participation in the third phase of such 
        program;
            (C) procedures to ensure, to the extent practicable, that an 
        agency which intends to pursue research, development, or 
        production of a technology developed by a small business concern 
        under an SBIR program enters into follow-on, non-SBIR funding 
        agreements with the small business concern for such research, 
        development, or production;
            (D) an increase to $100,000 in the amount of funds which an 
        agency may award in the first phase of an SBIR program, and to 
        $750,000 in the second phase of an SBIR program, and an 
        adjustment of such amounts once every 5 years to reflect 
        economic adjustments and programmatic considerations;
            (E) a process for notifying the participating SBIR agencies 
        and potential SBIR participants of the 1991, 1992, and the 
        current critical technologies, as identified--
                (i) by the National Critical Technologies Panel (or its 
            successor), in accordance with section 6683 \5\ of title 42; 
            or
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                (ii) by the Secretary of Defense, in accordance with 
            section 2522 \5\ of title 10;

            (F) enhanced outreach efforts to increase the participation 
        of socially and economically disadvantaged small business 
        concerns, as defined in section 637(a)(4) of this title, and the 
        participation of small businesses that are 51 percent owned and 
        controlled by women in technological innovation and in SBIR 
        programs, including the third phase of such programs, and the 
        collection of data to document such participation;
            (G) technical and programmatic guidance to encourage 
        agencies to develop gap-funding programs to address the delay 
        between an award for the first phase of an SBIR program and the 
        application for and extension of an award for the second phase 
        of such program;
            (H) procedures to ensure that a small business concern that 
        submits a proposal for a funding agreement for the first phase 
        of an SBIR program and that has received more than 15 second 
        phase SBIR awards during the preceding 5 fiscal years is able to 
        demonstrate the extent to which it was able to secure third 
        phase funding to develop concepts resulting from previous second 
        phase SBIR awards; and
            (I) procedures to ensure that agencies participating in the 
        SBIR program retain the information submitted under subparagraph 
        (H) at least until the Government Accountability Office submits 
        the report required under section 105 of the Small Business 
        Research and Development Enhancement Act of 1992.

                    (3) Additional modifications

        Not later than 120 days after December 21, 2000, the 
    Administrator shall modify the policy directives issued pursuant to 
    this subsection--
            (A) to clarify that the rights provided for under paragraph 
        (2)(A) apply to all Federal funding awards under this section, 
        including the first phase (as described in subsection (e)(4)(A) 
        of this section), the second phase (as described in subsection 
        (e)(4)(B) of this section), and the third phase (as described in 
        subsection (e)(4)(C) of this section);
            (B) to provide for the requirement of a succinct 
        commercialization plan with each application for a second phase 
        award that is moving toward commercialization;
            (C) to require agencies to report to the Administration, not 
        less frequently than annually, all instances in which an agency 
        pursued research, development, or production of a technology 
        developed by a small business concern using an award made under 
        the SBIR program of that agency, and determined that it was not 
        practicable to enter into a follow-on non-SBIR program funding 
        agreement with the small business concern, which report shall 
        include, at a minimum--
                (i) the reasons why the follow-on funding agreement with 
            the small business concern was not practicable;
                (ii) the identity of the entity with which the agency 
            contracted to perform the research, development, or 
            production; and
                (iii) a description of the type of funding agreement 
            under which the research, development, or production was 
            obtained; and

            (D) to implement subsection (v) of this section, including 
        establishing standardized procedures for the provision of 
        information pursuant to subsection (k)(3) of this section.

(k) Database

                         (1) Public database

        Not later than 180 days after December 21, 2000, the 
    Administrator shall develop, maintain, and make available to the 
    public a searchable, up-to-date, electronic database that includes--
            (A) the name, size, location, and an identifying number 
        assigned by the Administrator, of each small business concern 
        that has received a first phase or second phase SBIR or STTR 
        award from a Federal agency;
            (B) a description of each first phase or second phase SBIR 
        or STTR award received by that small business concern, 
        including--
                (i) an abstract of the project funded by the award, 
            excluding any proprietary information so identified by the 
            small business concern;
                (ii) the Federal agency making the award; and
                (iii) the date and amount of the award;

            (C) an identification of any business concern or subsidiary 
        established for the commercial application of a product or 
        service for which an SBIR or STTR award is made;
            (D) information regarding mentors and Mentoring Networks, as 
        required by section 657e(d) of this title; and
            (E) with respect to assistance under the STTR program only--
                (i) whether the small business concern or the research 
            institution initiated their collaboration on each assisted 
            STTR project;
                (ii) whether the small business concern or the research 
            institution originated any technology relating to the 
            assisted STTR project;
                (iii) the length of time it took to negotiate any 
            licensing agreement between the small business concern and 
            the research institution under each assisted STTR project; 
            and
                (iv) how the proceeds from commercialization, marketing, 
            or sale of technology resulting from each assisted STTR 
            project were allocated (by percentage) between the small 
            business concern and the research institution.

                       (2) Government database

        Not later than 180 days after December 21, 2000, the 
    Administrator, in consultation with Federal agencies required to 
    have an SBIR program pursuant to subsection (f)(1) of this section 
    or an STTR program pursuant to subsection (n)(1) of this section, 
    shall develop and maintain a database to be used exclusively for 
    SBIR and STTR program evaluation that--
            (A) contains for each second phase award made by a Federal 
        agency--
                (i) information collected in accordance with paragraph 
            (3) on revenue from the sale of new products or services 
            resulting from the research conducted under the award;
                (ii) information collected in accordance with paragraph 
            (3) on additional investment from any source, other than 
            first phase or second phase SBIR or STTR awards, to further 
            the research and development conducted under the award; and
                (iii) any other information received in connection with 
            the award that the Administrator, in conjunction with the 
            SBIR and STTR program managers of Federal agencies, 
            considers relevant and appropriate;

            (B) includes any narrative information that a small business 
        concern receiving a second phase award voluntarily submits to 
        further describe the outputs and outcomes of its awards;
            (C) includes for each applicant for a first phase or second 
        phase award that does not receive such an award--
                (i) the name, size, and location, and an identifying 
            number assigned by the Administration;
                (ii) an abstract of the project; and
                (iii) the Federal agency to which the application was 
            made;

            (D) includes any other data collected by or available to any 
        Federal agency that such agency considers may be useful for SBIR 
        or STTR program evaluation; and
            (E) is available for use solely for program evaluation 
        purposes by the Federal Government or, in accordance with policy 
        directives issued by the Administration, by other authorized 
        persons who are subject to a use and nondisclosure agreement 
        with the Federal Government covering the use of the database.

                (3) Updating information for database

        (A) In general

            A small business concern applying for a second phase award 
        under this section shall be required to update information in 
        the database established under this subsection for any prior 
        second phase award received by that small business concern. In 
        complying with this paragraph, a small business concern may 
        apportion sales or additional investment information relating to 
        more than one second phase award among those awards, if it notes 
        the apportionment for each award.

        (B) Annual updates upon termination

            A small business concern receiving a second phase award 
        under this section shall--
                (i) update information in the database concerning that 
            award at the termination of the award period; and
                (ii) be requested to voluntarily update such information 
            annually thereafter for a period of 5 years.

                    (4) Protection of information

        Information provided under paragraph (2) shall be considered 
    privileged and confidential and not subject to disclosure pursuant 
    to section 552 of title 5.

                      (5) Rule of construction

        Inclusion of information in the database under this subsection 
    shall not be considered to be publication for purposes of subsection 
    (a) or (b) of section 102 of title 35.

(l) Reporting of awards made from single proposal, to multiple award 
        winners, or to critical technology topics

                         (1) Single proposal

        If a Federal agency required to establish an SBIR program under 
    subsection (f) of this section makes an award with respect to an 
    SBIR solicitation topic or subtopic for which the agency received 
    only 1 proposal, the agency shall provide written justification for 
    making the award in its next quarterly report to the Administration 
    and in the agency's next annual report required under subsection 
    (g)(8) of this section.

                         (2) Multiple awards

        An agency referred to in paragraph (1) shall include in its next 
    annual report required under subsection (g)(8) of this section an 
    accounting of the awards the agency has made for the first phase of 
    an SBIR program during the reporting period to entities that have 
    received more than 15 awards for the second phase of an SBIR program 
    during the preceding 5 fiscal years.

                   (3) Critical technology awards

        An agency referred to in paragraph (1) shall include in its next 
    annual report required under subsection (g)(8) of this section, an 
    accounting of the number of awards it has made to critical 
    technology topics, as defined in subsection (g)(3) of this section, 
    including an identification of the specific critical technologies 
    topics, and the percentage by number and dollar amount of the 
    agency's total SBIR awards to such critical technology topics.

(m) Termination

    The authorization to carry out the Small Business Innovation 
Research Program established under this section shall terminate on 
September 30, 2008.

(n) Required expenditures for STTR by Federal agencies

                  (1) Required expenditure amounts

        (A) In general

            With respect to each fiscal year through fiscal year 2009, 
        each Federal agency that has an extramural budget for research, 
        or research and development, in excess of $1,000,000,000 for 
        that fiscal year, shall expend with small business concerns not 
        less than the percentage of that extramural budget specified in 
        subparagraph (B), specifically in connection with STTR programs 
        that meet the requirements of this section and any policy 
        directives and regulations issued under this section.

        (B) Expenditure amounts

            The percentage of the extramural budget required to be 
        expended by an agency in accordance with subparagraph (A) shall 
        be--
                (i) 0.15 percent for each fiscal year through fiscal 
            year 2003; and
                (ii) 0.3 percent for fiscal year 2004 and each fiscal 
            year thereafter.

                           (2) Limitations

        A Federal agency shall not--
            (A) use any of its STTR budget established pursuant to 
        paragraph (1) for the purpose of funding administrative costs of 
        the program, including costs associated with salaries and 
        expenses, or, in the case of a small business concern or a 
        research institution, costs associated with salaries, expenses, 
        and administrative overhead (other than those direct or indirect 
        costs allowable under guidelines of the Office of Management and 
        Budget and the governmentwide Federal Acquisition Regulation 
        issued in accordance with section 421(c)(1) of title 41); or
            (B) make available for the purpose of meeting the 
        requirements of paragraph (1) an amount of its extramural budget 
        for basic research which exceeds the percentage specified in 
        paragraph (1).

             (3) Exclusion of certain funding agreements

        Funding agreements with small business concerns for research or 
    research and development which result from competitive or single 
    source selections other than an STTR program shall not be considered 
    to meet any portion of the percentage requirements of paragraph (1).

(o) Federal agency STTR authority

    Each Federal agency required to establish an STTR program in 
accordance with subsection (n) of this section and regulations issued 
under this chapter, shall--
        (1) unilaterally determine categories of projects to be included 
    in its STTR program;
        (2) issue STTR solicitations in accordance with a schedule 
    determined cooperatively with the Administration;
        (3) unilaterally determine research topics within the agency's 
    STTR solicitations, giving special consideration to broad research 
    topics and to topics that further 1 or more critical technologies, 
    as identified--
            (A) by the National Critical Technologies Panel (or its 
        successor) in reports required under section 6683 \6\ of title 
        42; or
---------------------------------------------------------------------------
    \6\ See References in Text note below.
---------------------------------------------------------------------------
            (B) by the Secretary of Defense, in accordance with section 
        2522 \6\ of title 10;

        (4) unilaterally receive and evaluate proposals resulting from 
    STTR solicitations;
        (5) unilaterally select awardees for its STTR funding agreements 
    and inform each awardee under such an agreement, to the extent 
    possible, of the expenses of the awardee that will be allowable 
    under the funding agreement;
        (6) administer its own STTR funding agreements (or delegate such 
    administration to another agency);
        (7) make payments to recipients of STTR funding agreements on 
    the basis of progress toward or completion of the funding agreement 
    requirements and, in all cases, make payment to recipients under 
    such agreements in full, subject to audit, on or before the last day 
    of the 12-month period beginning on the date of the completion of 
    such requirements;
        (8) include, as part of its annual performance plan as required 
    by subsections (a) and (b) of section 1115 of title 31, a section on 
    its STTR program, and shall submit such section to the Committee on 
    Small Business of the Senate, and the Committee on Science and the 
    Committee on Small Business of the House of Representatives;
        (9) collect such data from awardees as is necessary to assess 
    STTR program outputs and outcomes;
        (10) submit an annual report on the STTR program to the 
    Administration and the Office of Science and Technology Policy;
        (11) adopt the agreement developed by the Administrator under 
    subsection (w) of this section as the agency's model agreement for 
    allocating between small business concerns and research institutions 
    intellectual property rights and rights, if any, to carry out 
    follow-on research, development, or commercialization;
        (12) develop, in consultation with the Office of Federal 
    Procurement Policy and the Office of Government Ethics, procedures 
    to ensure that federally funded research and development centers (as 
    defined in subsection (e)(8) of this section) that participate in 
    STTR agreements--
            (A) are free from organizational conflicts of interests 
        relative to the STTR program;
            (B) do not use privileged information gained through work 
        performed for an STTR agency or private access to STTR agency 
        personnel in the development of an STTR proposal; and
            (C) use outside peer review, as appropriate;

        (13) not later than July 31, 1993, develop procedures for 
    assessing the commercial merit and feasibility of STTR proposals, as 
    evidenced by--
            (A) the small business concern's record of successfully 
        commercializing STTR or other research;
            (B) the existence of second phase funding commitments from 
        private sector or non-STTR funding sources;
            (C) the existence of third phase follow-on commitments for 
        the subject of the research; and
            (D) the presence of other indicators of the commercial 
        potential of the idea;

        (14) implement an outreach program to research institutions and 
    small business concerns for the purpose of enhancing its STTR 
    program, in conjunction with any such outreach done for purposes of 
    the SBIR program; and
        (15) collect, and maintain in a common format in accordance with 
    subsection (v) of this section, such information from awardees as is 
    necessary to assess the STTR program, including information 
    necessary to maintain the database described in subsection (k) of 
    this section.

(p) STTR policy directive

                            (1) Issuance

        The Administrator shall issue a policy directive for the general 
    conduct of the STTR programs within the Federal Government. Such 
    policy directive shall be issued after consultation with--
            (A) the heads of each of the Federal agencies required by 
        subsection (n) of this section to establish an STTR program;
            (B) the Under Secretary of Commerce for Intellectual 
        Property and Director of the United States Patent and Trademark 
        Office; and
            (C) the Director of the Office of Federal Procurement 
        Policy.

                            (2) Contents

        The policy directive required by paragraph (1) shall provide 
    for--
            (A) simplified, standardized, and timely STTR solicitations;
            (B) a simplified, standardized funding process that provides 
        for--
                (i) the timely receipt and review of proposals;
                (ii) outside peer review, if appropriate;
                (iii) protection of proprietary information provided in 
            proposals;
                (iv) selection of awardees;
                (v) retention by a small business concern of the rights 
            to data generated by the concern in the performance of an 
            STTR award for a period of not less than 4 years;
                (vi) continued use by a small business concern, as a 
            directed bailment, of any property transferred by a Federal 
            agency to the small business concern in the second phase of 
            the STTR program for a period of not less than 2 years, 
            beginning on the initial date of the concern's participation 
            in the third phase of such program;
                (vii) cost sharing;
                (viii) cost principles and payment schedules; and
                (ix) 1-year awards for the first phase of an STTR 
            program, generally not to exceed $100,000, and 2-year awards 
            for the second phase of an STTR program, generally not to 
            exceed $750,000, greater or lesser amounts to be awarded at 
            the discretion of the awarding agency, and shorter or longer 
            periods of time to be approved at the discretion of the 
            awarding agency where appropriate for a particular project;

            (C) minimizing regulatory burdens associated with 
        participation in STTR programs;
            (D) guidelines for a model agreement, to be used by all 
        agencies, for allocating between small business concerns and 
        research institutions intellectual property rights and rights, 
        if any, to carry out follow-on research, development, or 
        commercialization;
            (E) procedures to ensure that--
                (i) a recipient of an STTR award is a small business 
            concern, as defined in section 632 of this title and the 
            regulations promulgated thereunder; and
                (ii) such small business concern exercises management 
            and control of the performance of the STTR funding agreement 
            pursuant to a business plan providing for the 
            commercialization of the technology that is the subject 
            matter of the award; and

            (F) procedures to ensure, to the extent practicable, that an 
        agency which intends to pursue research, development, or 
        production of a technology developed by a small business concern 
        under an STTR program enters into follow-on, non-STTR funding 
        agreements with the small business concern for such research, 
        development, or production.

                          (3) Modifications

        Not later than 120 days after October 15, 2001, the 
    Administrator shall modify the policy directive issued pursuant to 
    this subsection to clarify that the rights provided for under 
    paragraph (2)(B)(v) apply to all Federal funding awards under this 
    section, including the first phase (as described in subsection 
    (e)(6)(A) of this section), the second phase (as described in 
    subsection (e)(6)(B) of this section), and the third phase (as 
    described in subsection (e)(6)(C) of this section).

(q) Discretionary technical assistance

                           (1) In general

        Each Federal agency required by this section to conduct an SBIR 
    program may enter into an agreement with a vendor selected under 
    paragraph (2) to provide small business concerns engaged in SBIR 
    projects with technical assistance services, such as access to a 
    network of scientists and engineers engaged in a wide range of 
    technologies, or access to technical and business literature 
    available through on-line data bases, for the purpose of assisting 
    such concerns in--
            (A) making better technical decisions concerning such 
        projects;
            (B) solving technical problems which arise during the 
        conduct of such projects;
            (C) minimizing technical risks associated with such 
        projects; and
            (D) developing and commercializing new commercial products 
        and processes resulting from such projects.

                        (2) Vendor selection

        Each agency may select a vendor to assist small business 
    concerns to meet the goals listed in paragraph (1) for a term not to 
    exceed 3 years. Such selection shall be competitive and shall 
    utilize merit-based criteria.

                 (3) Additional technical assistance

        (A) First phase

            Each agency referred to in paragraph (1) may provide 
        services described in paragraph (1) to first phase SBIR award 
        recipients in an amount equal to not more than $4,000, which 
        shall be in addition to the amount of the recipient's award.

        (B) Second phase

            Each agency referred to in paragraph (1) may authorize any 
        second phase SBIR award recipient to purchase, with funds 
        available from their SBIR awards, services described in 
        paragraph (1), in an amount equal to not more than $4,000 per 
        year.

(r) Third phase agreements

                           (1) In general

        In the case of a small business concern that is awarded a 
    funding agreement for the second phase of an SBIR or STTR program, a 
    Federal agency may enter into a third phase agreement with that 
    business concern for additional work to be performed during or after 
    the second phase period. The second phase funding agreement with the 
    small business concern may, at the discretion of the agency awarding 
    the agreement, set out the procedures applicable to third phase 
    agreements with that agency or any other agency.

                (2) ``Third phase agreement'' defined

        In this subsection, the term ``third phase agreement'' means a 
    follow-on, non-SBIR or non-STTR funded contract as described in 
    paragraph (4)(C) or paragraph (6)(C) of subsection (e) of this 
    section.

                  (3) Intellectual property rights

        Each funding agreement under an SBIR or STTR program shall 
    include provisions setting forth the respective rights of the United 
    States and the small business concern with respect to intellectual 
    property rights and with respect to any right to carry out follow-on 
    research.

(s) Outreach

                   (1) ``Eligible State'' defined

        In this subsection, the term ``eligible State'' means a State--
            (A) if the total value of contracts awarded to the State 
        during fiscal year 1995 under this section was less than 
        $5,000,000; and
            (B) that certifies to the Administration described in 
        paragraph (2) \7\ that the State will, upon receipt of 
        assistance under this subsection, provide matching funds from 
        non-Federal sources in an amount that is not less than 50 
        percent of the amount provided under this subsection.
---------------------------------------------------------------------------
    \7\ So in original. The words ``described in paragraph (2)'' 
probably should not appear.
---------------------------------------------------------------------------

                        (2) Program authority

        Of amounts made available to carry out this section for each of 
    the fiscal years 2000 through 2005, the Administrator may expend 
    with eligible States not more than $2,000,000 in each such fiscal 
    year in order to increase the participation of small business 
    concerns located in those States in the programs under this section.

                      (3) Amount of assistance

        The amount of assistance provided to an eligible State under 
    this subsection in any fiscal year--
            (A) shall be equal to twice the total amount of matching 
        funds from non-Federal sources provided by the State; and
            (B) shall not exceed $100,000.

                        (4) Use of assistance

        Assistance provided to an eligible State under this subsection 
    shall be used by the State, in consultation with State and local 
    departments and agencies, for programs and activities to increase 
    the participation of small business concerns located in the State in 
    the programs under this section, including--
            (A) the establishment of quantifiable performance goals, 
        including goals relating to--
                (i) the number of program awards under this section made 
            to small business concerns in the State; and
                (ii) the total amount of Federal research and 
            development contracts awarded to small business concerns in 
            the State;

            (B) the provision of competition outreach support to small 
        business concerns in the State that are involved in research and 
        development; and
            (C) the development and dissemination of educational and 
        promotional information relating to the programs under this 
        section to small business concerns in the State.

(t) Inclusion in strategic plans

    Program information relating to the SBIR and STTR programs shall be 
included by each Federal agency in any update or revision required of 
the Federal agency under section 306(b) of title 5.

(u) Coordination of technology development programs

          (1) Definition of technology development program

        In this subsection, the term ``technology development program'' 
    means--
            (A) the Experimental Program to Stimulate Competitive 
        Research of the National Science Foundation, as established 
        under section 1862g of title 42;
            (B) the Defense Experimental Program to Stimulate 
        Competitive Research of the Department of Defense;
            (C) the Experimental Program to Stimulate Competitive 
        Research of the Department of Energy;
            (D) the Experimental Program to Stimulate Competitive 
        Research of the Environmental Protection Agency;
            (E) the Experimental Program to Stimulate Competitive 
        Research of the National Aeronautics and Space Administration;
            (F) the Institutional Development Award Program of the 
        National Institutes of Health; and
            (G) the National Research Initiative Competitive Grants 
        Program of the Department of Agriculture.

                    (2) Coordination requirements

        Each Federal agency that is subject to subsection (f) of this 
    section and that has established a technology development program 
    may, in each fiscal year, review for funding under that technology 
    development program--
            (A) any proposal to provide outreach and assistance to one 
        or more small business concerns interested in participating in 
        the SBIR program, including any proposal to make a grant or loan 
        to a company to pay a portion or all of the cost of developing 
        an SBIR proposal, from an entity, organization, or individual 
        located in--
                (i) a State that is eligible to participate in that 
            program; or
                (ii) a State described in paragraph (3); or

            (B) any proposal for the first phase of the SBIR program, if 
        the proposal, though meritorious, is not funded through the SBIR 
        program for that fiscal year due to funding restraints, from a 
        small business concern located in--
                (i) a State that is eligible to participate in a 
            technology development program; or
                (ii) a State described in paragraph (3).

                   (3) Additionally eligible State

        A State referred to in subparagraph (A)(ii) or (B)(ii) of 
    paragraph (2) is a State in which the total value of contracts 
    awarded to small business concerns under all SBIR programs is less 
    than the total value of contracts awarded to small business concerns 
    in a majority of other States, as determined by the Administrator in 
    biennial fiscal years, beginning with fiscal year 2000, based on the 
    most recent statistics compiled by the Administrator.

(v) Simplified reporting requirements

    The Administrator shall work with the Federal agencies required by 
this section to have an SBIR or STTR program to standardize reporting 
requirements for the collection of data from SBIR or STTR applicants and 
awardees, including data for inclusion in the database under subsection 
(k) of this section, taking into consideration the unique needs of each 
agency, and to the extent possible, permitting the updating of 
previously reported information by electronic means. Such requirements 
shall be designed to minimize the burden on small businesses.

(w) STTR model agreement for intellectual property rights

                           (1) In general

        The Administrator shall promulgate regulations establishing a 
    single model agreement for use in the STTR program that allocates 
    between small business concerns and research institutions 
    intellectual property rights and rights, if any, to carry out 
    follow-on research, development, or commercialization.

                     (2) Opportunity for comment

        In promulgating regulations under paragraph (1), the 
    Administrator shall provide to affected agencies, small business 
    concerns, research institutions, and other interested parties the 
    opportunity to submit written comments.

(Pub. L. 85-536, Sec. 2[9], July 18, 1958, 72 Stat. 391; Pub. L. 97-219, 
Secs. 3-5, July 22, 1982, 96 Stat. 217, 218, 221; Pub. L. 99-443, 
Secs. 1, 2, Oct. 6, 1986, 100 Stat. 1120; Pub. L. 100-590, title I, 
Sec. 108, Nov. 3, 1988, 102 Stat. 2994; Pub. L. 102-484, div. D, title 
XLII, Sec. 4237(d), Oct. 23, 1992, 106 Stat. 2692; Pub. L. 102-564, 
title I, Secs. 103, 104, title II, Sec. 202(a)-(c), title III, 
Secs. 301(a), 305, Oct. 28, 1992, 106 Stat. 4250, 4254, 4256, 4257, 
4261, 4262; Pub. L. 103-403, title VI, Sec. 607, Oct. 22, 1994, 108 
Stat. 4204; Pub. L. 104-208, div. D, title I, Sec. 110, Sept. 30, 1996, 
110 Stat. 3009-733; Pub. L. 105-135, title V, Sec. 501, Dec. 2, 1997, 
111 Stat. 2620; Pub. L. 106-113, div. B, Sec. 1000(a)(9) [title IV, 
Sec. 4732(b)(5)], Nov. 29, 1999, 113 Stat. 1536, 1501A-583; Pub. L. 106-
554, Sec. 1(a)(9) [title I, Secs. 103-107, 109, 110, 111(c), 113, 
114(b)], Dec. 21, 2000, 114 Stat. 2763, 2763A-669, 2763A-673, 2763A-679, 
2763A-681; Pub. L. 107-50, Secs. 2, 3(a), 4-7, Oct. 15, 2001, 115 Stat. 
263-265; Pub. L. 108-271, Sec. 8(b), July 7, 2004, 118 Stat. 814.)

                        Repeal of Subsection (s)

        Pub. L. 105-135, title V, Sec. 501(b)(2), Dec. 2, 1997, 111 
    Stat. 2622, as amended, provided that, effective October 1, 2005, 
    subsection (s) of this section is repealed.

                       References in Text

    The antitrust laws, referred to in subsec. (d)(3), are classified 
generally to chapter 1 (Sec. 1 et seq.) of this title.
    The Federal Trade Commission Act, referred to in subsec. (d)(3), is 
act Sept. 26, 1914, ch. 311, 38 Stat. 717, as amended, which is 
classified generally to subchapter I (Sec. 41 et seq.) of chapter 2 of 
this title. For complete classification of this Act to the Code, see 
section 58 of this title and Tables.
    Executive Order 12333, referred to in subsec. (e)(2), is set out as 
a note under section 401 of Title 50, War and National Defense.
    Section 421(c)(1) of title 41, referred to in subsec. (e)(8), was in 
the original ``section 35(c)(1) of the Office of Federal Procurement 
Policy Act'' which has been translated as meaning section 25(c)(1) of 
that Act to reflect the probable intent of Congress because that Act 
does not contain a section 35 and section 25(c) of that Act relates to 
issuance of the Federal Acquisition Regulation.
    Section 6683 of title 42, referred to in subsecs. (g)(3)(A), 
(j)(2)(E)(i), and (o)(3)(A), was omitted from the Code.
    Section 2522 of title 10, referred to in subsecs. (g)(3)(B), 
(j)(2)(E)(ii), and (o)(3)(B), which related to annual defense critical 
technology plan, was repealed, and section 2518 (relating to Defense 
Advanced Manufacturing Technology Partnerships) was redesignated as 
section 2522, by Pub. L. 102-484, div. D, title XLII, Secs. 4202(a), 
4232(a), Oct. 23, 1992, 106 Stat. 2659, 2687, and subsequently repealed.
    Section 105 of the Small Business Research and Development 
Enhancement Act of 1992, referred to in subsec. (j)(2)(I), is section 
105 of Pub. L. 102-564, which is set out below.

                          Codification

    Section 209 of act July 30, 1953, ch. 282, title II, 67 Stat. 237, 
was previously classified to this section. See section 645 of this title 
and Codification note set out under section 631 of this title.


                               Amendments

    2004--Subsec. (j)(2)(I). Pub. L. 108-271 substituted ``Government 
Accountability Office'' for ``General Accounting Office''.
    2001--Subsec. (b)(4). Pub. L. 107-50, Sec. 2(b), struck out 
``pilot'' before ``programs;''.
    Subsec. (b)(7). Pub. L. 107-50, Sec. 6(d), substituted ``, (o)(9), 
and (o)(15) of this section, the number of proposals received from, and 
the number and total amount of awards to, HUBZone small business 
concerns under each of the SBIR and STTR programs,'' for ``and (o)(9) of 
this section,''.
    Subsec. (e)(6). Pub. L. 107-50, Sec. 2(b), struck out ``pilot'' 
before ``program'' in introductory provisions.
    Subsec. (k)(1). Pub. L. 107-50, Sec. 6(b)(1), inserted ``or STTR'' 
after ``SBIR'' in subpars. (A) to (C) and added subpar. (E).
    Subsec. (k)(2). Pub. L. 107-50, Sec. 6(b)(2)(A), (B), in 
introductory provisions, inserted ``or an STTR program pursuant to 
subsection (n)(1) of this section'' after ``(f)(1) of this section'' and 
substituted ``exclusively for SBIR and STTR'' for ``solely for SBIR''.
    Subsec. (k)(2)(A)(iii). Pub. L. 107-50, Sec. 6(b)(2)(C), inserted 
``and STTR'' after ``SBIR''.
    Subsec. (k)(2)(D). Pub. L. 107-50, Sec. 6(b)(2)(D), inserted ``or 
STTR'' after ``SBIR''.
    Subsec. (n)(1). Pub. L. 107-50, Sec. 2(a), amended heading and text 
of par. (1) generally. Prior to amendment, text read as follows: ``With 
respect to fiscal years 1998, 1999, 2000, and 2001, each Federal agency 
that has an extramural budget for research, or research and development, 
in excess of $1,000,000,000 for that fiscal year, is authorized to 
expend with small business concerns not less than 0.15 percent of that 
extramural budget specifically in connection with STTR programs that 
meet the requirements of this section and any policy directives and 
regulations issued under this section.''
    Subsec. (o)(11). Pub. L. 107-50, Sec. 7(b), substituted ``adopt the 
agreement developed by the Administrator under subsection (w) of this 
section as the agency's model agreement'' for ``develop a model 
agreement not later than July 31, 1993, to be approved by the 
Administration,''.
    Subsec. (o)(14). Pub. L. 107-50, Sec. 4, added par. (14).
    Subsec. (o)(15). Pub. L. 107-50, Sec. 6(a), added par. (15).
    Subsec. (p)(2)(B)(ix). Pub. L. 107-50, Sec. 3, substituted 
``$750,000'' for ``$500,000'' and inserted ``, and shorter or longer 
periods of time to be approved at the discretion of the awarding agency 
where appropriate for a particular project'' before the semicolon at the 
end.
    Subsec. (p)(3). Pub. L. 107-50, Sec. 5, added par. (3).
    Subsec. (v). Pub. L. 107-50, Sec. 6(c), inserted ``or STTR'' after 
``SBIR'' in two places.
    Subsec. (w). Pub. L. 107-50, Sec. 7(a), added subsec. (w).
    2000--Subsec. (b)(7). Pub. L. 106-554, Sec. 1(a)(9) [title I, 
Sec. 107(b)], inserted before period at end ``, including the data on 
output and outcomes collected pursuant to subsections (g)(10) and (o)(9) 
of this section, and a description of the extent to which Federal 
agencies are providing in a timely manner information needed to maintain 
the database described in subsection (k) of this section''.
    Pub. L. 106-554, Sec. 1(a)(9) [title I, Sec. 104], substituted ``, 
and to the Committee on Science and the Committee on Small Business of 
the House of Representatives,'' for ``and the Committee on Small 
Business of the House of Representatives''.
    Subsec. (e)(4)(C)(i). Pub. L. 106-554, Sec. 1(a)(9) [title I, 
Sec. 105], substituted ``; or'' for ``; and'' at end.
    Subsec. (g)(9). Pub. L. 106-554, Sec. 1(a)(9) [title I, Sec. 106], 
added par. (9).
    Subsec. (g)(10). Pub. L. 106-554, Sec. 1(a)(9) [title I, 
Sec. 107(a)], added par. (10).
    Subsec. (i). Pub. L. 106-554, Sec. 1(a)(9) [title I, Sec. 109], 
inserted subsec. heading, designated existing provisions as par. (1), 
inserted par. heading, and added par. (2).
    Subsec. (j)(3). Pub. L. 106-554, Sec. 1(a)(9) [title I, Sec. 110], 
added par. (3).
    Subsec. (k). Pub. L. 106-554, Sec. 1(a)(9) [title I, Sec. 107(c)], 
amended subsec. (k) generally, substituting present provisions for 
provisions which read ``(k) [Reserved]''.
    Subsec. (m). Pub. L. 106-554, Sec. 1(a)(9) [title I, Sec. 103], 
amended heading and text generally. Prior to amendment, text read as 
follows: ``The authorization to carry out the Small Business Innovation 
Research Program under this section shall terminate on October 1, 
2000.''
    Subsec. (s)(2). Pub. L. 106-554, Sec. 1(a)(9) [title I, 
Sec. 114(b)], substituted ``for each of the fiscal years 2000 through 
2005,'' for ``for fiscal year 1998, 1999, 2000, or 2001''.
    Subsec. (u). Pub. L. 106-554, Sec. 1(a)(9) [title I, Sec. 111(c)], 
added subsec. (u).
    Subsec. (v). Pub. L. 106-554, Sec. 1(a)(9) [title I, Sec. 113], 
added subsec. (v).
    1999--Subsec. (p)(1)(B). Pub. L. 106-113 amended subpar. (B) 
generally. Prior to amendment, subpar. (B) read as follows: ``the 
Commissioner of Patents and Trademarks; and''.
    1997--Subsec. (e)(4)(A). Pub. L. 105-135, Sec. 501(b)(1)(B), 
substituted ``subparagraph (B)'' for ``subparagraph (B)(ii)''.
    Subsec. (n)(1). Pub. L. 105-135, Sec. 501(a), added par. (1) and 
struck out heading and text of former par. (1). Text read as follows: 
``Each Federal agency which has an extramural budget for research or 
research and development in excess of $1,000,000,000 in fiscal year 
1994, 1995, or 1996, is authorized to expend with small business 
concerns--
        ``(A) not less than 0.05 percent of such budget in fiscal year 
    1994;
        ``(B) not less than 0.1 percent of such budget in fiscal year 
    1995; and
        ``(C) not less than 0.15 percent of such budget in fiscal years 
    1996 and 1997,
specifically in connection with STTR programs which meet the 
requirements of this section, policy directives, and regulations issued 
under this section.''
    Subsec. (o)(8) to (13). Pub. L. 105-135, Sec. 501(b)(1)(A), added 
pars. (8) and (9) and redesignated former pars. (8) to (11) as (10) to 
(13), respectively.
    Subsecs. (s), (t). Pub. L. 105-135, Sec. 501(b)(1)(C), added 
subsecs. (s) and (t).
    1996--Subsec. (n)(1)(C). Pub. L. 104-208 substituted ``fiscal years 
1996 and 1997'' for ``fiscal year 1996''.
    1994--Subsec. (q)(2). Pub. L. 103-403 amended heading and text of 
par. (2) generally. Prior to amendment, text read as follows: 
``Annually, each agency may select a vendor for purposes of this 
subsection using competitive, merit-based criteria, to assist small 
business concerns to meet the goals listed in paragraph (1).''
    1992--Subsec. (b)(4). Pub. L. 102-564, Sec. 202(a)(1), inserted 
before semicolon at end ``and small business technology transfer pilot 
programs''.
    Subsec. (b)(5) to (7). Pub. L. 102-564, Sec. 202(a)(2), inserted 
``and STTR'' after ``SBIR'' wherever appearing.
    Subsec. (e)(1). Pub. L. 102-564, Sec. 103(c), substituted ``for the 
Department of Energy it shall not include amounts obligated for atomic 
energy defense programs solely for weapons activities or for naval 
reactor programs'' for ``for the Department of Defense it shall not 
include amounts obligated solely for operational systems development''.
    Pub. L. 102-484, Sec. 4237(d)(1), (2)(A), (h)(2), temporarily 
amended par. (1) by striking out ``except that for the Department of 
Defense it shall not include amounts obligated solely for operational 
systems development, and'' after ``Government-operated facilities,'' and 
substituting ``, and except that for the Department of Energy it shall 
not include amounts obligated for atomic energy defense programs for 
weapons and weapons-related activities or for naval reactor programs;'' 
for semicolon at end. See section 4237(h)(2) of Pub. L. 102-484 set out 
in a Small Business Innovation Research Program in Department of Defense 
note below.
    Subsec. (e)(4)(A). Pub. L. 102-564, Sec. 103(a)(1), inserted ``that 
appear to have commercial potential, as described in subparagraph 
(B)(ii),'' after ``ideas''.
    Subsec. (e)(4)(B). Pub. L. 102-564, Sec. 103(a)(2), added subpar. 
(B) and struck out former subpar. (B) which read as follows: ``a second 
phase to further develop the proposed ideas to meet the particular 
program needs, the awarding of which shall take into consideration the 
scientific and technical merit and feasibility evidenced by the first 
phase and, where two or more proposals are evaluated as being of 
approximately equal scientific and technical merit and feasibility, 
special consideration shall be given to those proposals that have 
demonstrated third phase, non-Federal capital commitments; and''.
    Subsec. (e)(4)(C). Pub. L. 102-564, Sec. 103(a)(2), added subpar. 
(C) and struck out former subpar. (C) which read as follows: ``where 
appropriate, a third phase in which non-Federal capital pursues 
commercial applications of the research or research and development and 
which may also involve follow-on non-SBIR funded production contracts 
with a Federal agency for products or processes intended for use by the 
United States Government; and''.
    Subsec. (e)(6) to (8). Pub. L. 102-564, Sec. 202(b), added pars. (6) 
to (8).
    Subsec. (f). Pub. L. 102-564, Sec. 103(b), amended subsec. (f) 
generally. Prior to amendment, subsec. (f) consisted of pars. (1) and 
(2) relating to Federal agency extramural budget expenditures for fiscal 
years 1982 and thereafter for small business concerns in connection with 
small business innovation research programs meeting the requirements of 
the Small Business Innovation Development Act of 1982.
    Subsec. (f)(2). Pub. L. 102-484, Sec. 4237(d)(2)(B), (h)(2), 
temporarily struck out par. (2) which read ``Amounts appropriated for 
atomic energy defense programs of the Department of Energy shall for the 
purposes of paragraph (1) be excluded from the amount of the research or 
research and development budget of that Department.'' See section 
4237(h)(2) of Pub. L. 102-484 set out in a Small Business Innovation 
Research Program in Department of Defense note below.
    Subsec. (g)(3), (4). Pub. L. 102-564, Sec. 103(d), added par. (3) 
and redesignated former par. (3) as (4). Former par. (4) redesignated 
(5).
    Subsec. (g)(5). Pub. L. 102-564, Sec. 103(d)(1), (h)(2), (i), 
redesignated par. (4) as (5) and inserted ``subject to subsection (l) of 
this section,'' before ``unilaterally'' and ``and inform each awardee 
under such an agreement, to the extent possible, of the expenses of the 
awardee that will be allowable under the funding agreement'' before 
semicolon at end. Former par. (5) redesignated (6).
    Subsec. (g)(6). Pub. L. 102-564, Sec. 103(d)(1), redesignated par. 
(5) as (6). Former par. (6) redesignated (7).
    Subsec. (g)(7). Pub. L. 102-564, Sec. 103(d)(1), (e), redesignated 
par. (6) as (7) and inserted before semicolon at end ``and, in all 
cases, make payment to recipients under such agreements in full, subject 
to audit, on or before the last day of the 12-month period beginning on 
the date of completion of such requirements''. Former par. (7) 
redesignated (8).
    Subsec. (g)(8). Pub. L. 102-564, Sec. 103(d)(1), redesignated par. 
(7) as (8).
    Subsec. (j). Pub. L. 102-564, Sec. 103(f), designated existing 
provisions as par. (1) and inserted heading, redesignated former pars. 
(1) and (2) as subpars. (A) and (B), respectively, of par. (1), former 
subpars. (A) to (H) of former par. (2) as cls. (i) to (viii), 
respectively, of subpar. (B) of par. (1), and former pars. (3) to (7) as 
subpars. (C) to (G), respectively, of par. (1), and added par. (2).
    Subsec. (k). Pub. L. 102-564, Sec. 103(g), amended subsec. (k) 
generally, substituting ``(k) [Reserved]'' for prior provisions of 
subsec. (k) which read as follows: ``The Director of the Office of 
Science and Technology Policy, in consultation with the Federal 
Coordinating Council for Science, Engineering and Research, shall, in 
addition to such other responsibilities imposed upon him by the Small 
Business Innovation Development Act of 1982--
        ``(1) independently survey and monitor all phases of the 
    implementation and operation of SBIR programs within agencies 
    required to establish an SBIR program, including compliance with the 
    expenditures of funds according to the requirements of subsection 
    (f) of this section; and
        ``(2) report not less than annually, and at such other times as 
    the Director may deem appropriate, to the Committees on Small 
    Business of the Senate and the House of Representatives on all 
    phases of the implementation and operation of SBIR programs within 
    agencies required to establish an SBIR program, together with such 
    recommendations as the Director may deem appropriate.''
    Subsec. (l). Pub. L. 102-564, Sec. 103(h)(1), added subsec. (l).
    Subsec. (m). Pub. L. 102-564, Sec. 104(b), added subsec. (m).
    Subsecs. (n) to (p). Pub. L. 102-564, Sec. 202(c), added subsecs. 
(n) to (p).
    Subsec. (q). Pub. L. 102-564, Sec. 301(a), added subsec. (q).
    Subsec. (r). Pub. L. 102-564, Sec. 305, added subsec. (r).
    1988--Subsec. (j)(6), (7). Pub. L. 100-590 added pars. (6) and (7).
    1986--Subsec. (e)(1). Pub. L. 99-443, Sec. 1, inserted provision 
that for the Department of Defense, the extramural budget shall not 
include amounts obligated solely for operational systems development.
    1982--Subsec. (b)(4) to (7). Pub. L. 97-219, Sec. 3, added pars. (4) 
to (7).
    Subsecs. (e) to (k). Pub. L. 97-219, Sec. 4, added subsecs. (e) to 
(k).

                         Change of Name

    Committee on Small Business of Senate changed to Committee on Small 
Business and Entrepreneurship of Senate. See Senate Resolution No. 123, 
One Hundred Seventh Congress, June 29, 2001.


                    Effective Date of 2001 Amendment

    Pub. L. 107-50, Sec. 3(b), Oct. 15, 2001, 115 Stat. 263, provided 
that: ``The amendments made by subsection (a) [amending this section] 
shall be effective beginning in fiscal year 2004.''


                    Effective Date of 1999 Amendment

    Amendment by Pub. L. 106-113 effective 4 months after Nov. 29, 1999, 
see section 1000(a)(9) [title IV, Sec. 4731] of Pub. L. 106-113, set out 
as a note under section 1 of Title 35, Patents.


            Effective and Termination Dates of 1997 Amendment

    Amendment by Pub. L. 105-135 effective Oct. 1, 1997, see section 3 
of Pub. L. 105-135, set out as a note under section 631 of this title.
    Section 501(b)(2) of Pub. L. 105-135, as amended by Pub. L. 106-554, 
Sec. 1(a)(9) [title I, Sec. 114(a)], Dec. 21, 2000, 114 Stat. 2763, 
2763A-681, provided that: ``Effective October 1, 2005, section 9(s) of 
the Small Business Act [15 U.S.C. 638(s)] (as added by paragraph (1) of 
this subsection) is repealed.''


                    Effective Date of 1996 Amendment

    Amendment by Pub. L. 104-208 effective Oct. 1, 1996, see section 3 
of Pub. L. 104-208, set out as a note under section 633 of this title.


            Effective and Termination Dates of 1992 Amendment

    For effective and termination dates of amendment by Pub. L. 102-484, 
see section 4237(g) and (h) of Pub. L. 102-484, set out in a Small 
Business Innovation Research Program in Department of Defense note 
below.


                   Termination Date of 1982 Amendment

    Section 5 of Pub. L. 97-219, as amended by Pub. L. 99-443, Sec. 2, 
Oct. 6, 1986, 100 Stat. 1120; Pub. L. 102-484, div. D, title XLII, 
Sec. 4237(a), Oct. 23, 1992, 106 Stat. 2691, which provided that 
effective Oct. 1, 1993, subsecs. (b)(4) through (7) and (e) through (k) 
of this section were to be repealed, was repealed by Pub. L. 102-564, 
title I, Sec. 104(a), Oct. 28, 1992, 106 Stat. 4254.


          Continuation of SBIR Program Beyond Termination Date

    Pub. L. 106-554, Sec. 1(a)(4) [div. B, title I, Sec. 149], Dec. 21, 
2000, 114 Stat. 2763, 2763A-251, provided that: ``The Small Business 
Innovation Research program, otherwise expiring at the end of fiscal 
year 2000, is authorized to continue in effect during fiscal year 
2001.''


   Congressional Findings: Small Business Innovation Research Program 
                       Reauthorization Act of 2000

    Pub. L. 106-554, Sec. 1(a)(9) [title I, Sec. 102], Dec. 21, 2000, 
114 Stat. 2763, 2763A-668, provided that: ``Congress finds that--
        ``(1) the small business innovation research program established 
    under the Small Business Innovation Development Act of 1982 [see 
    Short Title of 1982 Amendment note set out under section 631 of this 
    title], and reauthorized by the Small Business Research and 
    Development Enhancement Act of 1992 [see Short Title of 1992 
    Amendments note set out under section 631 of this title] (in this 
    title [see Short Title of 2000 Amendment note set out under section 
    631 of this title] referred to as the `SBIR program') is highly 
    successful in involving small businesses in federally funded 
    research and development;
        ``(2) the SBIR program made the cost-effective and unique 
    research and development capabilities possessed by the small 
    businesses of the Nation available to Federal agencies and 
    departments;
        ``(3) the innovative goods and services developed by small 
    businesses that participated in the SBIR program have produced 
    innovations of critical importance in a wide variety of high-
    technology fields, including biology, medicine, education, and 
    defense;
        ``(4) the SBIR program is a catalyst in the promotion of 
    research and development, the commercialization of innovative 
    technology, the development of new products and services, and the 
    continued excellence of this Nation's high-technology industries; 
    and
        ``(5) the continuation of the SBIR program will provide expanded 
    opportunities for one of the Nation's vital resources, its small 
    businesses, will foster invention, research, and technology, will 
    create jobs, and will increase this Nation's competitiveness in 
    international markets.''


                    National Research Council Reports

    Pub. L. 106-554, Sec. 1(a)(9) [title I, Sec. 108], Dec. 21, 2000, 
114 Stat. 2763, 2763A-671, provided that:
    ``(a) Study and Recommendations.--The head of each agency with a 
budget of more than $50,000,000 for its SBIR program for fiscal year 
1999, in consultation with the Small Business Administration, shall, not 
later than 6 months after the date of the enactment of this Act [Dec. 
21, 2000], cooperatively enter into an agreement with the National 
Academy of Sciences for the National Research Council to--
        ``(1) conduct a comprehensive study of how the SBIR program has 
    stimulated technological innovation and used small businesses to 
    meet Federal research and development needs, including--
            ``(A) a review of the value to the Federal research agencies 
        of the research projects being conducted under the SBIR program, 
        and of the quality of research being conducted by small 
        businesses participating under the program, including a 
        comparison of the value of projects conducted under the SBIR 
        program to those funded by other Federal research and 
        development expenditures;
            ``(B) to the extent practicable, an evaluation of the 
        economic benefits achieved by the SBIR program, including the 
        economic rate of return, and a comparison of the economic 
        benefits, including the economic rate of return, achieved by the 
        SBIR program with the economic benefits, including the economic 
        rate of return, of other Federal research and development 
        expenditures;
            ``(C) an evaluation of the noneconomic benefits achieved by 
        the SBIR program over the life of the program;
            ``(D) a comparison of the allocation for fiscal year 2000 of 
        Federal research and development funds to small businesses with 
        such allocation for fiscal year 1983, and an analysis of the 
        factors that have contributed to such allocation; and
            ``(E) an analysis of whether Federal agencies, in fulfilling 
        their procurement needs, are making sufficient effort to use 
        small businesses that have completed a second phase award under 
        the SBIR program; and
        ``(2) make recommendations with respect to--
            ``(A) measures of outcomes for strategic plans submitted 
        under section 306 of title 5, United States Code, and 
        performance plans submitted under section 1115 of title 31, 
        United States Code, of each Federal agency participating in the 
        SBIR program;
            ``(B) whether companies who can demonstrate project 
        feasibility, but who have not received a first phase award, 
        should be eligible for second phase awards, and the potential 
        impact of such awards on the competitive selection process of 
        the program;
            ``(C) whether the Federal Government should be permitted to 
        recoup some or all of its expenses if a controlling interest in 
        a company receiving an SBIR award is sold to a foreign company 
        or to a company that is not a small business concern;
            ``(D) how to increase the use by the Federal Government in 
        its programs and procurements of technology-oriented small 
        businesses; and
            ``(E) improvements to the SBIR program, if any are 
        considered appropriate.
    ``(b) Participation by Small Business.--
        ``(1) In general.--In a manner consistent with law and with 
    National Research Council study guidelines and procedures, 
    knowledgeable individuals from the small business community with 
    experience in the SBIR program shall be included--
            ``(A) in any panel established by the National Research 
        Council for the purpose of performing the study conducted under 
        this section; and
            ``(B) among those who are asked by the National Research 
        Council to peer review the study.
        ``(2) Consultation.--To ensure that the concerns of small 
    business are appropriately considered under this subsection, the 
    National Research Council shall consult with and consider the views 
    of the Office of Technology and the Office of Advocacy of the Small 
    Business Administration and other interested parties, including 
    entities, organizations, and individuals actively engaged in 
    enhancing or developing the technological capabilities of small 
    business concerns.
    ``(c) Progress Reports.--The National Research Council shall provide 
semiannual progress reports on the study conducted under this section to 
the Committee on Science and the Committee on Small Business of the 
House of Representatives, and to the Committee on Small Business [now 
Committee on Small Business and Entrepreneurship] of the Senate.
    ``(d) Report.--The National Research Council shall transmit to the 
heads of agencies entering into an agreement under this section and to 
the Committee on Science and the Committee on Small Business of the 
House of Representatives, and to the Committee on Small Business [now 
Committee on Small Business and Entrepreneurship] of the Senate--
        ``(1) not later than 3 years after the date of the enactment of 
    this Act [Dec. 21, 2000], a report including the results of the 
    study conducted under subsection (a)(1) and recommendations made 
    under subsection (a)(2); and
        ``(2) not later than 6 years after that date of the enactment, 
    an update of such report.''


    Congressional Findings and Purposes: Small Business Research and 
                   Development Enhancement Act of 1992

    Section 102 of title I of Pub. L. 102-564 provided that:
    ``(a) Findings.--The Congress finds that--
        ``(1) the small business innovation research program established 
    under the Small Business Innovation Development Act of 1982 [see 
    Short Title of 1982 Amendment note set out under section 631 of this 
    title] (hereafter in this Act [see Short Title of 1992 Amendments 
    note set out under section 631 of this title] referred to as the 
    `SBIR' program) has been a successful method of involving small 
    business concerns in Federal research and development;
        ``(2) the small business innovation research program has been an 
    effective catalyst for the development of technological innovations 
    by small business concerns;
        ``(3) small business innovation research program participants 
    have provided high quality research and development in a cost-
    effective manner;
        ``(4) the innovative products and services developed by small 
    business concerns participating in the small business innovation 
    research program have been important to the national defense, as 
    well as to the missions of the other participating Federal agencies;
        ``(5) the small business innovation research program has 
    effectively stimulated the commercialization of technology developed 
    through Federal research and development, benefiting both the public 
    and private sectors of the Nation;
        ``(6) by encouraging the development and commercialization of 
    technological innovations, the small business innovation research 
    program has created jobs, expanded business opportunities for small 
    firms, stimulated the development of new products and services, and 
    improved the competitiveness of the Nation's high technology 
    industries;
        ``(7) the small business innovation research program has also 
    helped to increase exports from small business concerns;
        ``(8) despite the general success of the small business 
    innovation research program, the proportion of Federal research and 
    development funds received by small business concerns has not 
    increased over the life of the program, but has remained at 3 
    percent; and
        ``(9) although the participating Federal agencies have 
    successfully implemented most aspects of the small business 
    innovation research program, additional outreach efforts are 
    necessary to stimulate increased participation of socially and 
    economically disadvantaged small business concerns.
    ``(b) Purposes.--The purposes of this title [see Short Title of 1992 
Amendments note set out under section 631 of this title] are--
        ``(1) to expand and improve the small business innovation 
    research program;
        ``(2) to emphasize the program's goal of increasing private 
    sector commercialization of technology developed through Federal 
    research and development;
        ``(3) to increase small business participation in Federal 
    research and development; and
        ``(4) to improve the Federal Government's dissemination of 
    information concerning the small business innovation research 
    program, particularly with regard to program participation by women-
    owned small business concerns and by socially and economically 
    disadvantaged small business concerns.''


                 Recommendations of Secretary of Defense

    Section 106 of Pub. L. 102-564 provided that: ``Not later than March 
31, 1996, the Secretary of Defense shall submit a recommendation to the 
Congress addressing whether there has been a demonstrable reduction in 
the quality of research performed under the SBIR program since the 
beginning of fiscal year 1993, such that increasing the percentage under 
section 9(f)(1)(C) of the Small Business Act [15 U.S.C. 638(f)(1)(C)] 
(as amended by section 103 of this Act) would adversely affect the 
performance of the research programs of the Department of Defense.''


                 Timing of Issuance of Policy Directive

    Section 202(d) of Pub. L. 102-564 provided that: ``The policy 
directive required by section 9(p) of the Small Business Act [15 U.S.C. 
638(p)] (as added by subsection (c) of this section) shall be 
published--
        ``(1) in proposed form (with an opportunity for public comment 
    of not less than 30 days), not later than April 30, 1993; and
        ``(2) in final form, not later than July 31, 1993.''


    Sense of Congress Concerning American-Made Equipment and Products

    Section 306 of Pub. L. 102-564 provided that:
    ``(a) Purchase of American-Made Equipment and Products.--It is the 
sense of the Congress that an entity that is awarded a funding agreement 
under the SBIR program of a Federal agency under section 9 of the Small 
Business Act [15 U.S.C. 638] should, when purchasing any equipment or a 
product with funds provided through the funding agreement, purchase only 
American-made equipment and products, to the extent possible in keeping 
with the overall purposes of that program.
    ``(b) Notice to SBIR Awardees.--Each Federal agency that awards 
funding agreements under the SBIR program shall provide to each 
recipient of such an award a notice describing the sense of the 
Congress, as set forth in subsection (a).''


   Small Business Innovation Research Program in Department of Defense

    Section 4237 of Pub. L. 102-484 provided that:
    ``(a) Extension of Program.--[Amended section 5 of Pub. L. 97-219, 
set out as a note above.]
    ``(b) Limitation on Program Awards.--Amounts paid to a small 
business concern by the Department of Defense under the Small Business 
Innovation Research Program for a project--
        ``(1) in phase I under the program may not exceed $100,000; and
        ``(2) in phase II under the program may not exceed $750,000.
    ``(c) Commercial Applications Strategy.--Not later than 270 days 
after the date of the enactment of this Act [Oct. 23, 1992], the 
Secretary of Defense, in consultation with the Administrator of the 
Small Business Administration, shall develop and issue a strategy for 
effectuating the transition of successful projects under the Small 
Business Innovation Research Program from phase II under the program 
into phase III under the program.
    ``(d) Repeal of Exclusion of Certain Activities.--[Amended this 
section.]
    ``(e) Percentage of Required Expenditures for SBIR Contracts.--(1) 
The Small Business Innovation Research Program shall apply to the 
Department of Defense (including the military departments) as if the 
percentage specified in section 9(f)(1) of the Small Business Act (15 
U.S.C. 638(f)(1)) with respect to fiscal years after fiscal year 1982 
were determined in accordance with the table set forth in paragraph (2) 
(rather than 1.25 percent).
    ``(2)(A) The percentage under section 9(f)(1) of the Small Business 
Act (15 U.S.C. 638(f)(1)) for any fiscal year for the Department of 
Defense and each military department shall be determined in accordance 
with the following table:


            ``For fiscal year:                   The percentage is:

  1993....................................    1.25
  1994....................................    1.5
  1995....................................    1.75
  1996....................................    2.0
  1997....................................    2.25
  1998 and thereafter.....................    2.5.


    ``(B) If the determination of the Secretary of Defense under 
subparagraph (C) is a negative determination (as set forth in that 
paragraph), then the percentage under section 9(f)(1) of the Small 
Business Act (15 U.S.C. 638(f)(1)) for the Department of Defense and 
each military department for fiscal years after fiscal year 1996 shall 
remain at the level applicable for fiscal year 1996 (notwithstanding the 
percentages specified in subparagraph (A) for fiscal years after fiscal 
year 1996).
    ``(C) Not later than June 30, 1996, the Secretary of Defense during 
fiscal year 1996 shall determine whether there has been a demonstrable 
reduction in the quality of research performed under funding agreements 
awarded by the Department of Defense under the SBIR program since the 
beginning of fiscal year 1993 such that increasing the percentage under 
subparagraph (A) for fiscal years after fiscal year 1996 with respect to 
the department would adversely affect the performance of the 
department's research programs. If the determination of the Secretary is 
that there has been such a demonstrable reduction in the quality of 
research such that increasing the percentage under subparagraph (B) for 
fiscal years after fiscal year 1996 with respect to the department would 
adversely affect the performance of the department's research programs, 
the Secretary shall be considered for purposes of subparagraph (B) to 
have made a negative determination. The determination of the Secretary 
concerned under this paragraph shall be made after considering the 
assessment of the Comptroller General with respect to that department in 
the report transmitted under subparagraph (D).
    ``(D) Not later than March 30, 1996, the Comptroller General shall 
transmit to the Congress and the Secretary of Defense a report setting 
forth the Comptroller General's assessment, with respect to the 
Department of Defense of whether there has been a demonstrable reduction 
in the quality of research performed under funding agreements awarded by 
the department under the SBIR program since the beginning of fiscal year 
1993 such that increasing the percentage under subparagraph (A) for 
fiscal years after fiscal year 1996 with respect to the department would 
adversely affect the performance of the department's research programs.
    ``(E) The results of each determination under subparagraph (C) shall 
be transmitted to the Congress not later than June 30, 1996.
    ``(f) Definitions.--In this section:
        ``(1) The term `Small Business Innovation Research Program' 
    means the program established under the following provisions of 
    section 9 of the Small Business Act (15 U.S.C. 638):
            ``(A) Paragraphs (4) through (7) of subsection (b).
            ``(B) Subsections (e) through (k).
        ``(2) The term `phase I', with respect to the Small Business 
    Innovation Research Program, means the first phase described in 
    subsection (e)(4)(A) of section 9 of the Small Business Act.
        ``(3) The term `phase II', with respect to the Small Business 
    Innovation Research Program, means the second phase described in 
    subsection (e)(4)(B) of such section.
        ``(4) The term `phase III', with respect to the Small Business 
    Innovation Research Program, means the third phase described in 
    subsection (e)(4)(C) of such section.
    ``(g) Effective Date.--Subject to subsection (h), this section, and 
the amendments made by this section, shall take effect on October 1, 
1992, and shall apply with respect to fiscal years after fiscal year 
1992.
    ``(h) Effectiveness of Section Conditional on Failure to Enact Other 
Legislation.--(1) In the event of the enactment of H.R. 4400 or S. 2941 
[S. 2941 was enacted into law as Pub. L. 102-564 on Oct. 28, 1992], 102d 
Congress, on or before the date of the enactment of this Act [Oct. 23, 
1992], then this section and the amendments made by this section shall 
not take effect.
    ``(2)(A) In the event of the enactment of H.R. 4400 or S. 2941, 102d 
Congress, after the date of the enactment of this Act, then, effective 
immediately before the enactment of H.R. 4400 or S. 2941, 102d 
Congress--
        ``(i) this section shall cease to be effective; and
        ``(ii) the provisions of a small business law that are amended 
    by this section shall be effective and read as such provisions of 
    that law were in effect immediately before the enactment of this 
    Act, except that to the extent that any amendment is made to such a 
    provision of a small business law by any other provision of law 
    referred to in subparagraph (B), such provision of a small business 
    law shall be effective and shall read as amended by that other 
    provision of law.
    ``(B) For the purposes of subparagraph (A)(ii), a provision of law 
referred to in this subparagraph is the following:
        ``(i) A provision of this Act other than a provision of this 
    section.
        ``(ii) A provision of any other Act if the provision takes 
    effect during the period beginning on the date of the enactment of 
    this Act and ending immediately before the enactment of H.R. 4400 or 
    S. 2941, 102d Congress.
    ``(C) In this paragraph, the term `small business law' means--
        ``(i) the Small Business Act (15 U.S.C. 631 et seq.); and
        ``(ii) the Small Business Innovation Development Act of 1982 
    [Pub. L. 97-219] (15 U.S.C. 638 note).''


   Use of Department of Agriculture Extramural Budget Funds in Small 
                  Business Innovation Research Program

    Pub. L. 99-500, Sec. 101(a) [title VI, Sec. 630], Oct. 18, 1986, 100 
Stat. 1783, 1783-30, and Pub. L. 99-591, Sec. 101(a) [title VI, 
Sec. 630], Oct. 30, 1986, 100 Stat. 3341, 3341-30, provided that: ``All 
funds appropriated for this fiscal year and all funds appropriated 
hereafter by this or any other Act that are determined to be part of the 
`extramural budget' of the Department of Agriculture for any fiscal year 
for purposes of meeting the requirements of section 9 of the Small 
Business Act (15 U.S.C. 638), as amended by the Small Business 
Innovation Development Act of 1982, Public Law 97-219, shall be 
available for contracts, grants or cooperative agreements with small 
business concerns for any purpose in furtherance of the small business 
innovation research program. Such funds may be transferred for such 
purpose from one appropriation to another or to a single account.''


   Congressional Findings and Declaration of Purpose: Small Business 
                   Innovation Development Act of 1982

    Section 2 of Pub. L. 97-219 provided that:
    ``(a) The Congress finds that--
        ``(1) technological innovation creates jobs, increases 
    productivity, competition, and economic growth, and is a valuable 
    counterforce to inflation and the United States balance-of-payments 
    deficit;
        ``(2) while small business is the principal source of 
    significant innovations in the Nation, the vast majority of 
    federally funded research and development is conducted by large 
    businesses, universities, and Government laboratories; and
        ``(3) small businesses are among the most cost-effective 
    performers of research and development and are particularly capable 
    of developing research and development results into new products.
    ``(b) Therefore, the purposes of the Act [amending this section] 
are--
        ``(1) to stimulate technological innovation;
        ``(2) to use small business to meet Federal research and 
    development needs;
        ``(3) to foster and encourage participation by minority and 
    disadvantaged persons in technological innovation; and
        ``(4) to increase private sector commercialization innovations 
    derived from Federal research and development.''


                     Reports of Comptroller General

    Section 105 of title I of Pub. L. 102-564 provided that:
    ``(a) Interim Report.--
        ``(1) In general.--The Comptroller General of the United States 
    shall submit to the Congress an interim report concerning the 
    quality of research performed under SBIR program funding agreements 
    entered into during fiscal year 1993 and thereafter. Copies of the 
    interim report shall be furnished to each agency that has 
    participated in the SBIR program in fiscal year 1993 or thereafter.
        ``(2) Contents of report.--The Comptroller General shall include 
    in the interim report required under paragraph (1)--
            ``(A) an assessment of the quality of the research performed 
        under the SBIR program funding agreements entered into by each 
        agency that has participated in the SBIR program beginning in 
        fiscal year 1993 or thereafter, specifically addressing--
                ``(i) with respect to each such agency, whether or not 
            there has been a demonstrable reduction in research quality; 
            and
                ``(ii) in the case of such reduction, whether an 
            increase in each such agency's required SBIR participation 
            in accordance with section 9(f)(1) of the Small Business Act 
            [15 U.S.C. 638(f)(1)] (as amended by subsection (b) of this 
            section [probably should be section 103(b) of this Act]) 
            would adversely affect the performance of the agency's 
            research programs;
            ``(B) an analysis of the program authorized by section 301 
        of the Small Business Research and Development Enhancement Act 
        of 1992 [amending this section], considering, among other 
        things--
                ``(i) the extent to which each SBIR agency has 
            implemented the program and the extent to which the program 
            has improved the quality of agency-sponsored research and 
            development;
                ``(ii) the effect of the program on recipient companies' 
            ability to develop and commercialize technology;
                ``(iii) the cost of the program and the average cost per 
            recipient company; and
                ``(iv) the extent to which SBIR companies continue to 
            use the service after completion of the program; and
            ``(C) such other factors as the Comptroller General may deem 
        appropriate.
    ``(b) Final Report.--The Comptroller General of the United States 
shall transmit to the Congress a final report containing--
        ``(1) a review of the progress made by Federal agencies in 
    meeting the requirements of section 9(f) of the Small Business Act 
    [15 U.S.C. 638(f)] (as amended by this Act), including increases in 
    expenditures required by that subsection;
        ``(2) an analysis of participation by small business concerns in 
    the third phase of SBIR programs, including a systematic evaluation 
    of the techniques adopted by Federal agencies to foster 
    commercialization;
        ``(3) an analysis of the extent to which awards under SBIR 
    programs are made pursuant to section 9(l) of the Small Business Act 
    (as added by section 103(h)) in cases in which a program 
    solicitation receives only 1 proposal;
        ``(4) an analysis of the extent to which awards in the first 
    phase of the SBIR program are made to small business concerns that 
    have received more than 15 second phase awards under the SBIR 
    program in the preceding 5 fiscal years, considering--
            ``(A) the extent to which such concerns were able to secure 
        Federal or private sector follow-on funding;
            ``(B) the extent to which the research developed under such 
        awards was commercialized; and
            ``(C) the amount of commercialization of research developed 
        under such awards, as compared to the amount of 
        commercialization of SBIR research for the entire SBIR program;
        ``(5) the results of periodic random audits of the extramural 
    budget of each such Federal agency;
        ``(6) a review of the extent to which the purposes of this title 
    [see Short Title of 1992 Amendments note set out under section 631 
    of this title] and the Small Business Innovation Development Act of 
    1982 [see Short Title of 1982 Amendment note set out under section 
    631 of this title] have been met with regard to fostering and 
    encouraging the participation of women-owned small business concerns 
    and socially and economically disadvantaged small business concerns 
    (as defined in the Small Business Act [15 U.S.C. 631 et seq.]) in 
    technological innovation, in general, and the SBIR program, in 
    particular;
        ``(7) an analysis of the effectiveness of the SBIR program in 
    promoting the development of the critical technologies identified by 
    the Secretary of Defense and the National Critical Technologies 
    Panel (or its successor), as described in subparagraph 9(j)(2)(E) of 
    the Small Business Act;
        ``(8) an analysis of the impact of agency application review 
    periods and funding cycles on SBIR program awardees' financial 
    status and ability to commercialize; and
        ``(9) recommendations to the Congress for tracking the extent to 
    which foreign firms, or United States firms with substantial foreign 
    ownership interests, benefit from technology or products developed 
    as a direct result of SBIR research or research and development.
    ``(c) Dates of Submission.--The report required--
        ``(1) under subsection (a), shall be submitted to the Congress 
    not later than March 31, 1995; and
        ``(2) under subsection (b), shall be submitted to the Congress 
    not later than 5 years after the date of enactment of this title 
    [Oct. 28, 1992].''
    Section 202(e) of Pub. L. 102-564 provided that: ``Not later than 
March 31, 1996, the Comptroller General of the United States shall 
submit a report to the Congress and the head of each agency that is 
required to make expenditures under the STTR program that--
        ``(1) sets forth the Comptroller General's assessment, with 
    respect to each such agency, of--
            ``(A) the quality of research performed under funding 
        agreements awarded by that agency under the STTR program since 
        the beginning of the program;
            ``(B) whether or not the STTR program has affected the 
        performance of that agency's research programs; and
            ``(C) the commercial potential of research conducted under 
        the STTR program, if sufficient data is available;
        ``(2) contains the Comptroller General's assessment as to the 
    effects of the STTR program, if any, on the research quality and 
    goals of the SBIR program; and
        ``(3) determines the agencies and the federally-funded research 
    and development centers' compliance with the procedures developed 
    under section 9(g)(10) of the Small Business Act [probably 9(o)(10); 
    15 U.S.C. 638(o)(10)], as amended by this section.''
    Section 6 of Pub. L. 97-219, as amended by Pub. L. 99-443, Sec. 3, 
Oct. 6, 1986, 100 Stat. 1120; Pub. L. 100-418, title VIII, Sec. 8008, 
Aug. 23, 1988, 102 Stat. 1561; Pub. L. 100-647, title IX, Sec. 9003, 
Nov. 10, 1988, 102 Stat. 3808, provided that:
    ``(a) The Comptroller General, no later than December 31, 1988, 
shall transmit a report to the appropriate committees of the House of 
Representatives and of the Senate evaluating the effectiveness to date 
of phase one and phase two of the SBIR Program as set out in section 
9(e)(4) of the Small Business Act [15 U.S.C. 638(e)(4)]. Such report 
shall examine the quality of the research supported by the SBIR Program 
compared to that traditionally supported by the affected agencies, and 
the extent to which the goals of the SBIR Program are being met. Such 
report shall also include the judgments of the heads of departments and 
agencies as to the effect of this Act [amending this section] on 
research programs.
    ``(b) The Comptroller General, no later than December 31, 1991, 
shall transmit to such committees an update of the report mandated under 
subsection (a). Such report, in addition, shall include an evaluation of 
phase three of the SBIR Program including a discussion of the aggregate 
commercial trends for products which are then currently in or have 
completed phase three of the program.
    ``(c) Not later than July 1, 1989, the Comptroller General shall 
transmit to the appropriate committees of the House of Representatives 
and the Senate recommendations as to the advisability of amending the 
Small Business Innovation Research program to--
        ``(1) increase each agency's share of research and development 
    expenditures devoted to it by 0.25 percent per year, until it is 3 
    percent of the total extramural research and development funds, and 
    targeting a portion of the increment at products with 
    commercialization or export potential;
        ``(2) make the Small Business Innovation Research program 
    permanent with a formal congressional review every 10 years, 
    beginning in 1993;
        ``(3) allocate a modest but appropriate share of each agency's 
    Small Business Innovation Research fund for administrative purposes 
    for effective management, quality maintenance, and the elimination 
    of program delays; and
        ``(4) include within the Small Business Innovation and Research 
    program all agencies expending between $20,000,000 and $100,000,000 
    in extramural research and development funds annually.''

       Ex. Ord. No. 13329. Encouraging Innovation in Manufacturing

    Ex. Ord. No. 13329, Feb. 24, 2004, 69 F.R. 9181, provided:
    By the authority vested in me as President by the Constitution and 
the laws of the United States of America, including the Small Business 
Act, as amended (15 U.S.C. 631 et seq.), and to help ensure that Federal 
agencies properly and effectively assist the private sector in its 
manufacturing innovation efforts, it is hereby ordered as follows:
    Section 1. Policy. Continued technological innovation is critical to 
a strong manufacturing sector in the United States economy. The Federal 
Government has an important role, including through the Small Business 
Innovation Research (SBIR) and the Small Business Technology Transfer 
(STTR) programs, in helping to advance innovation, including innovation 
in manufacturing, through small businesses.
    Sec. 2. Duties of Department and Agency Heads. The head of each 
executive branch department or agency with one or more SBIR programs or 
one or more STTR programs shall:
    (a) to the extent permitted by law and in a manner consistent with 
the mission of that department or agency, give high priority within such 
programs to manufacturing-related research and development to advance 
the policy set forth in section 1 of this order; and
    (b) submit reports annually to the Administrator of the Small 
Business Administration and the Director of the Office of Science and 
Technology Policy concerning the efforts of such department or agency to 
implement subsection 2(a) of this order.
    Sec. 3. Duties of Administrator of the Small Business 
Administration. The Administrator of the Small Business Administration:
    (a) shall establish, after consultation with the Director of the 
Office of Science and Technology Policy, formats and schedules for 
submission of reports by the heads of departments and agencies under 
subsection 2(b) of this order; and
    (b) is authorized to issue to departments and agencies guidelines 
and directives (in addition to the formats and schedules under 
subsection 3(a)) as the Administrator determines from time to time are 
necessary to implement subsection 2(a) of this order, after such 
guidelines and directives are submitted to the President, through the 
Director of the Office of Science and Technology Policy, for approval 
and are approved by the President.
    Sec. 4. Definitions. As used in this order:
    (a) ``Small Business Innovation Research (SBIR) program'' means a 
program to which section 9(e)(4) of the Small Business Act (15 U.S.C. 
638(e)(4)) refers;
    (b) ``Small Business Technology Transfer (STTR) program'' means a 
program to which section 9(e)(6) of the Small Business Act (15 U.S.C. 
638(e)(6)) refers;
    (c) ``research and development'' means an activity set forth in 
section 9(e)(5) of the Small Business Act (15 U.S.C. 638(e)(5)); and
    (d) ``manufacturing-related'' means relating to: (i) manufacturing 
processes, equipment and systems; or (ii) manufacturing workforce skills 
and protection.
    Sec. 5. General Provisions. (a) Nothing in this order shall be 
construed to impair or otherwise affect the authority of the Director of 
the Office of Management and Budget with respect to budget, 
administrative, or legislative proposals.
    (b) Nothing in this order shall be construed to require disclosure 
of information the disclosure of which is prohibited by law or by 
Executive Order, including Executive Order 12958 of April 17, 1995, as 
amended [50 U.S.C. 435 note].
    (c) This order is intended only to improve the internal management 
of the executive branch and is not intended to, and does not, create any 
right or benefit, substantive or procedural, enforceable at law or in 
equity, against the United States, its departments, agencies, or other 
entities, its officers or employees, or any other person.
                                                         George W. Bush.


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