Congress Reauthorizes the Small Business Innovation Research and Technology Transfer Programs

After more than three years of wrangling, Congress this week reauthorized the Small Business Innovation Research (“SBIR”) and Small Business Technology Transfer (“STTR”) programs until 2018 as part of the National Defense Authorization Act.  The authorization for the programs, which among other things directs federal agencies to provide a portion of their grant funding to small businesses with fewer than 500 employees, expired in 2008.  Since then, members of the House and Senate have engaged in a protracted debate over several key provisions of the program – most notably whether or not companies that are majority funded by venture capital can qualify for SBIR grants.

Under the deal reached last week, venture-backed companies may now compete for up to 25 percent of SBIR funds from three federal agencies – National Institutes of Health (NIH), the National Science Foundation (NSF), and the Department of Energy (DOE).  Venture-backed companies may also compete for up to 15 percent of SBIR funds from the remaining eight agencies that comprise the SBIR program.  Congress also raised the ceiling for grants in the SBIR and STTR programs to $150,000 for projects in their initial phase, and $1 million for projects in their second phase.  Agencies will also have to increase the amount set aside for small business from external research funding from 2.5 to 3.2 percent under the SBIR program, and from 0.3 to 0.45 percent under the STTR program.  Additionally, the House secured provisions that allow for companies funded by private equity and hedge funds to participate in the SBIR program alongside their venture-backed peers.

BayBio has long advocated for the reauthorization of the SBIR and STTR programs as part of our commitment to ensure access to capital for research and development for novel therapies, diagnostics, and devices in the Bay Area.  These federal programs provide crucial seed funding for small companies researching some of the most pernicious diseases, including cancer, diabetes, heart disease, HIV/AIDS, and Parkinson’s disease.  The reauthorization of the SBIR and STTR programs goes a long way to ensuring that novel investigational research for these diseases continues, and is a huge win for patients and researchers.

The full text of the National Defense Authorization Act can be found here.  Be advised that the Act is more than 1,800 pages long.  Use the Find command and enter “SBIR” to locate provisions specific to the SBIR reauthorization.  If you have any other questions or comments, please feel free to contact BayBio’s vice president of government affairs, Ritchard Engelhardt, at ritchard@baybio.org or (650) 871‑7101, Extension 217.

Source: BayBio