Senate Panel OKs Research and Tech Transfer Programs

The Senate Small Business and Entrepreneurship Committee this morning unanimously passed a measure reauthorizing two sometimes controversial programs requiring federal agencies with large research and development budgets to set aside a portion of their funding for small business contracts.

The Senate panel voted on the bill this morning reauthorizing the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs for 14 years.

The bill made it through the committee after months of debate among panel members and includes a hotly contested provision allowing some investment in the SBIR program by majority-owned venture capital firms.

Some small businesses had complained that large, well-funded firms would be able to take advantage of the program, which was intended to help small businesses.

"We've worked to address many of the concerns of the small business community and of my colleagues in the House and Senate, and this bill would keep these programs going strong," said Sen. John Kerry (D-Mass.), who chairs the panel. "This government-wide program has generated more than 84,000 patents and millions of jobs, and we need to make sure that it doesn't lapse, so that it can continue to help keep our military strong, advance medical breakthroughs and develop energy sources that are renewable and clean."

The SBIR program previously required federal agencies with an annual research and development budget of more than $100 million to allocate 2.5 percent of their extramural R&D dollars to the SBIR program. The measure voted on today bumped that up to 3.5 percent, but exempted the Health and Human Services Department from that increase.

There was a compromise in the vote today that will allow the National Institutes of Health, which is housed at HHS, to award up to 18 percent of its SBIR dollars to companies majority-owned and controlled by multiple venture capital firms. The remaining 10 agencies that have SBIR programs can award up to 8 percent of their SBIR dollars to this type of VC-controlled firm.

The measure also reauthorized and enhanced through 2014 the Federal and State Technology Partnership program and a program providing outreach to rural areas, among other things.

The programs reauthorized this morning are affiliated with the Small Business Administration.

By Sharon McLoone |  July 30, 2008; 1:40 PM ET Gov't Contracting
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