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U.S. Code as of:
01/19/04
Section 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)
(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).
(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
(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;
(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
(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 General Accounting 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
(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) 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.
(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.
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