H.R. 1425 (112th): Creating Jobs Through Small Business Innovation Act of 2011

112th Congress, 2011–2013. Text as of May 03, 2011 (Reported by House Committee).

Status & Summary | PDF | Source: GPO

IB

Union Calendar No. 85

112th CONGRESS

1st Session

H. R. 1425

[Report No. 112–90, Parts I and II]

IN THE HOUSE OF REPRESENTATIVES

April 7, 2011

(for herself, Mr. Altmire, Mr. Quayle, Mr. Wu, Mr. Hall, Ms. Eddie Bernice Johnson of Texas, Mr. Graves of Missouri, and Mr. Richmond) introduced the following bill; which was referred to the Committee on Science, Space, and Technology, and in addition to the Committees on Small Business and Armed Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

May 3, 2011

Rereferred to the Committee on Small Business, and in addition to the Committees on Science, Space, and Technology and Armed Services, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

May 26, 2011

Reported from the Committee on Science, Space, and Technology with an amendment

Strike out all after the enacting clause and insert the part printed in italic

July 1, 2011

Additional sponsors: Mr. Lipinski, Mrs. Biggert, Mr. Coble, Mr. West, Mr. Clarke of Michigan, Mr. Luján, Mr. Womack, Mrs. Lowey, Mr. Hanna, Mr. Walsh of Illinois, Mr. Chabot, Mr. Bartlett, Mr. Mulvaney, Mr. Barletta, Mr. Tipton, Mr. Lance, Mr. Jones, Ms. Herrera Beutler, and Mr. Smith of Texas

July 1, 2011

Reported from the Committee on Small Business with an amendment

Strike out all after the enacting clause and insert the part printed in boldface roman

July 1, 2011

Committee on Armed Services discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printed

For text of introduced bill, see copy of bill as introduced on April 7, 2011

A BILL

To reauthorize and improve the SBIR and STTR programs, and for other purposes.


1.

Short title

This Act may be cited as the Creating Jobs Through Small Business Innovation Act of 2011.

2.

Table of contents

The table of contents for this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

Sec. 3. Definitions.

Title I—REAUTHORIZATION OF THE SBIR AND STTR PROGRAMS

Sec. 101. Extension of termination dates.

Sec. 102. SBIR and STTR award levels.

Sec. 103. Agency and program flexibility.

Sec. 104. Elimination of Phase II invitations.

Sec. 105. Phase flexibility.

Sec. 106. Participation by firms with substantial investment from multiple venture capital operating companies, hedge funds, or private equity firms in a portion of the SBIR program.

Sec. 107. Ensuring that innovative small businesses with substantial investment from venture capital operating companies, hedge funds, or private equity firms are able to participate in the SBIR and STTR programs.

Sec. 108. SBIR and STTR special acquisition preference.

Sec. 109. Collaborating with Federal laboratories and research and development centers.

Sec. 110. Notice requirement.

Sec. 111. Additional SBIR and STTR Awards.

Title II—OUTREACH AND COMMERCIALIZATION INITIATIVES

Sec. 201. Technical assistance for awardees.

Sec. 202. Commercialization Readiness Program at Department of Defense.

Sec. 203. Commercialization Readiness Pilot Program for civilian agencies.

Sec. 204. Interagency Policy Committee.

Sec. 205. Clarifying the definition of Phase III.

Sec. 206. Shortened period for final decisions on proposals and applications.

Sec. 207. Phase 0 Proof of Concept Partnership pilot program.

Title III—OVERSIGHT AND EVALUATION

Sec. 301. Streamlining annual evaluation requirements.

Sec. 302. Data collection from agencies for SBIR.

Sec. 303. Data collection from agencies for STTR.

Sec. 304. Public database.

Sec. 305. Government database.

Sec. 306. Accuracy in funding base calculations.

Sec. 307. Continued evaluation by the National Academy of Sciences.

Sec. 308. Technology insertion reporting requirements.

Sec. 309. Obtaining consent from SBIR and STTR applicants to release contact information to economic development organizations.

Sec. 310. Pilot to allow funding for administrative, oversight, and contract processing costs.

Sec. 311. GAO study with respect to venture capital operating company, hedge fund, and private equity firm involvement.

Sec. 312. Reducing vulnerability of SBIR and STTR programs to fraud, waste, and abuse.

Sec. 313. Simplified paperwork requirements.

Sec. 314. Reducing fraud, waste, and abuse.

Title IV—POLICY DIRECTIVES

Sec. 401. Conforming amendments to the SBIR and the STTR Policy Directives.

Title V—OTHER PROVISIONS

Sec. 501. Report on SBIR and STTR program goals.

Sec. 502. Competitive selection procedures for SBIR and STTR programs.

Sec. 503. Loan restrictions.

Sec. 504. Program diversification.

3.

Definitions

In this Act—

(1)

the terms Administration and Administrator mean the Small Business Administration and the Administrator thereof, respectively;

(2)

the terms extramural budget, Federal agency, Small Business Innovation Research Program, SBIR, Small Business Technology Transfer Program, and STTR have the meanings given such terms in section 9 of the Small Business Act (15 U.S.C. 638); and

(3)

the term small business concern has the meaning given that term under section 3 of the Small Business Act (15 U.S.C. 632).

I

REAUTHORIZATION OF THE SBIR AND STTR PROGRAMS

101.

Extension of termination dates

(a)

SBIR

Section 9(m) of the Small Business Act (15 U.S.C. 638(m)) is amended—

(1)

by striking Termination.— and all that follows through the authorization and inserting Termination.—The authorization;

(2)

by striking 2008 and inserting 2014; and

(3)

by striking paragraph (2).

(b)

STTR

Section 9(n)(1)(A) of the Small Business Act (15 U.S.C. 638(n)(1)(A)) is amended—

(1)

by striking In general.— and all that follows through with respect and inserting In general.—With respect;

(2)

by striking 2009 and inserting 2014; and

(3)

by striking clause (ii).

102.

SBIR and STTR award levels

(a)

SBIR Adjustments

Section 9(j)(2)(D) of the Small Business Act (15 U.S.C. 638(j)(2)(D)) is amended—

(1)

by striking $100,000 and inserting $150,000; and

(2)

by striking $750,000 and inserting $1,000,000.

(b)

STTR Adjustments

Section 9(p)(2)(B)(ix) of the Small Business Act (15 U.S.C. 638(p)(2)(B)(ix)) is amended—

(1)

by striking $100,000 and inserting $150,000; and

(2)

by striking $750,000 and inserting $1,000,000.

(c)

Annual Adjustments

Section 9 of the Small Business Act (15 U.S.C. 638) is amended—

(1)

in subsection (j)(2)(D), by striking once every 5 years to reflect economic adjustments and programmatic considerations and inserting every year for inflation; and

(2)

in subsection (p)(2)(B)(ix), as amended by subsection (b) of this section, by inserting (each of which the Administrator shall adjust for inflation annually) after $1,000,000,.

(d)

Limitation on Size of Awards

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(aa)

Limitation on Size of Awards

(1)

Limitation

No Federal agency may issue an award under the SBIR program or the STTR program if the size of the award exceeds the award guidelines established under this section by more than 50 percent.

(2)

Maintenance of information

Participating agencies shall maintain information on awards exceeding the guidelines established under this section, including—

(A)

the amount of each award;

(B)

a justification for exceeding the award amount;

(C)

the identity and location of each award recipient; and

(D)

whether an award recipient has received any venture capital, hedge fund, or private equity firm investment and, if so, whether the recipient is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms.

(3)

Reports

The Administrator shall include the information described in paragraph (2) in the annual report of the Administrator to Congress.

(4)

Rule of construction

Nothing in this subsection shall be construed to prevent a Federal agency from supplementing an award under the SBIR program or the STTR program using funds of the Federal agency that are not part of the SBIR program or the STTR program of the Federal agency.

.

103.

Agency and program flexibility

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(bb)

Subsequent Phase II Awards

(1)

Agency flexibility

A small business concern that received a Phase I award from a Federal agency under this section shall be eligible to receive a subsequent Phase II award from another Federal agency, if the head of each relevant Federal agency or the relevant component of the Federal agency makes a written determination that the topics of the relevant awards are the same and both agencies report the awards to the Administrator for inclusion in the public database under subsection (k).

(2)

SBIR and sttr program flexibility

A small business concern that received a Phase I award under this section under the SBIR program or the STTR program may receive a subsequent Phase II award in either the SBIR program or the STTR program and the participating agency or agencies shall report the awards to the Administrator for inclusion in the public database under subsection (k).

.

104.

Elimination of Phase II invitations

Section 9(e) of the Small Business Act (15 U.S.C. 638(e)) is amended—

(1)

in paragraph (4)(B), by striking to further and inserting which shall not include any invitation, pre-screening, pre-selection, or down-selection process for eligibility for Phase II, that will further; and

(2)

in paragraph (6)(B), by striking to further develop proposed ideas to and inserting which shall not include any invitation, pre-screening, pre-selection, or down-selection process for eligibility for Phase II, that will further develop proposals that.

105.

Phase flexibility

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(cc)

Phase I required

Under this section, a Federal agency shall provide to a small business concern an award under Phase II of an SBIR program with respect to a project only if such agency finds that the small business concern has been provided an award under Phase I of an SBIR program with respect to such project or has completed the determinations described in subsection (e)(4)(A) with respect to such project despite not having been provided a Phase I award.

.

106.

Participation by firms with substantial investment from multiple venture capital operating companies, hedge funds, or private equity firms in a portion of the SBIR program

(a)

In General

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(dd)

Participation of Small Business Concerns Majority-Owned by Venture Capital Operating Companies, hedge funds, or private equity firms in the SBIR Program

(1)

Authority

Upon a written determination described in paragraph (2) provided to the Administrator, the Committee on Small Business and Entrepreneurship of the Senate, and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives not later than 30 days before the date on which an award is made—

(A)

the Director of the National Institutes of Health, the Secretary of Energy, the Administrator of the National Aeronautics and Space Administration, and the Director of the National Science Foundation may award not more than 45 percent of the funds allocated for the SBIR program of the Federal agency to small business concerns that are owned in majority part by multiple venture capital operating companies, hedge funds, or private equity firms through competitive, merit-based procedures that are open to all eligible small business concerns; and

(B)

the head of a Federal agency other than a Federal agency described in subparagraph (A) that participates in the SBIR program may award not more than 35 percent of the funds allocated for the SBIR program of the Federal agency to small business concerns that are owned in majority part by multiple venture capital operating companies, hedge funds, or private equity firms through competitive, merit-based procedures that are open to all eligible small business concerns.

(2)

Determination

A written determination described in this paragraph is a written determination by the head of a Federal agency that explains how the use of the authority under paragraph (1) will—

(A)

induce additional venture capital, hedge fund, or private equity firm funding of small business innovations;

(B)

substantially contribute to the mission of the Federal agency;

(C)

demonstrate a need for public research; and

(D)

otherwise fulfill the capital needs of small business concerns for additional financing for the SBIR project.

(3)

Registration

A small business concern that is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms and qualified for participation in the program authorized under paragraph (1) shall—

(A)

register with the Administrator on the date that the small business concern submits an application for an award under the SBIR program; and

(B)

indicate in any SBIR proposal that the small business concern is registered under subparagraph (A) as majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms.

(4)

Compliance

(A)

In general

The head of a Federal agency that makes an award under this subsection during a fiscal year shall collect and submit to the Administrator data relating to the number and dollar amount of Phase I awards, Phase II awards, and any other category of awards by the Federal agency under the SBIR program during that fiscal year.

(B)

Annual reporting

The Administrator shall include as part of each annual report by the Administration under subsection (b)(7) any data submitted under subparagraph (A) and a discussion of the compliance of each Federal agency that makes an award under this subsection during the fiscal year with the maximum percentages under paragraph (1).

(5)

Enforcement

If a Federal agency awards more than the percent of the funds allocated for the SBIR program of the Federal agency authorized under paragraph (1) for a purpose described in paragraph (1), the head of the Federal agency shall transfer an amount equal to the amount awarded in excess of the amount authorized under paragraph (1) to the funds for general SBIR programs from the non-SBIR and non-STTR research and development funds of the Federal agency not later than 180 days after the date on which the Federal agency made the award that caused the total awarded under paragraph (1) to be more than the amount authorized under paragraph (1) for a purpose described in paragraph (1).

(6)

Final decisions on applications under the sbir program

(A)

Definition

In this paragraph, the term covered small business concern means a small business concern that—

(i)

was not majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms on the date on which the small business concern submitted an application in response to a solicitation under the SBIR programs; and

(ii)

on the date of the award under the SBIR program is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms.

(B)

In general

If a Federal agency does not make an award under a solicitation under the SBIR program before the date that is 9 months after the date on which the period for submitting applications under the solicitation ends—

(i)

a covered small business concern is eligible to receive the award, without regard to whether the covered small business concern meets the requirements for receiving an award under the SBIR program for a small business concern that is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms, if the covered small business concern meets all other requirements for such an award; and

(ii)

the head of the Federal agency shall transfer an amount equal to any amount awarded to a covered small business concern under the solicitation to the funds for general SBIR programs from the non-SBIR and non-STTR research and development funds of the Federal agency, not later than 90 days after the date on which the Federal agency makes the award.

(7)

Evaluation criteria

A Federal agency may not use investment of venture capital or investment from hedge funds or private equity firms as a criterion for the award of contracts under the SBIR program or STTR program.

.

(b)

Technical and Conforming Amendment

Section 3 of the Small Business Act (15 U.S.C. 632) is amended by adding at the end the following:

(aa)

Venture Capital Operating Company

In this Act, the term venture capital operating company means an entity described in clause (i), (v), or (vi) of section 121.103(b)(5) of title 13, Code of Federal Regulations (or any successor thereto).

(bb)

Hedge fund

In this Act, the term hedge fund has the meaning given that term in section 13(h)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1851(h)(2)).

(cc)

Private equity firm

In this Act, the term private equity firm has the meaning given the term private equity fund in section 13(h)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1851(h)(2)).

.

107.

Ensuring that innovative small businesses with substantial investment from venture capital operating companies, hedge funds, or private equity firms are able to participate in the SBIR and STTR programs

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(ee)

Venture capital operating companies, hedge funds, and private equity firms

Effective only for the SBIR and STTR programs the following shall apply:

(1)

A business concern that has more than 500 employees shall not qualify as a small business concern.

(2)

In determining whether a small business concern is independently owned and operated under section 3(a)(1) or meets the small business size standards instituted under section 3(a)(2), the Administrator shall not consider a business concern to be affiliated with a venture capital operating company, hedge fund, or private equity firm (or with any other business that the venture capital operating company, hedge fund, or private equity firm has financed) if—

(A)

the venture capital operating company, hedge fund, or private equity firm does not own 50 percent or more of the business concern; and

(B)

employees of the venture capital operating company, hedge fund, or private equity firm do not constitute a majority of the board of directors of the business concern.

(3)

A business concern shall be deemed to be independently owned and operated if—

(A)

it is owned in majority part by one or more natural persons or venture capital operating companies, hedge funds, or private equity firms;

(B)

there is no single venture capital operating company, hedge fund, or private equity firm that owns 50 percent or more of the business concern; and

(C)

there is no single venture capital operating company, hedge fund, or private equity firm the employees of which constitute a majority of the board of directors of the business concern.

(4)

If a venture capital operating company, hedge fund, or private equity firm controlled by a business with more than 500 employees (in this paragraph referred to as a VCOC, hedge fund, or private equity firm under large business control) has an ownership interest in a small business concern that is owned in majority part by venture capital operating companies, hedge funds, or private equity firms, the small business concern is eligible to receive an award under the SBIR or STTR program only if—

(A)

not more than two VCOCs, hedge funds, or private equity firms under large business control have an ownership interest in the small business concern; and

(B)

the VCOCs, hedge funds, or private equity firms under large business control do not collectively own more than 20 percent of the small business concern.

.

108.

SBIR and STTR special acquisition preference

Section 9(r) of the Small Business Act (15 U.S.C. 638(r)) is amended by adding at the end the following:

(4)

Phase iii awards

To the greatest extent practicable, Federal agencies and Federal prime contractors shall issue Phase III awards relating to technology, including sole source awards, to the SBIR and STTR award recipients that developed the technology.

.

109.

Collaborating with Federal laboratories and research and development centers

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(ff)

Collaborating With Federal Laboratories and Research and Development Centers

(1)

Authorization

Subject to the limitations under this section, the head of each participating Federal agency may make SBIR and STTR awards to any eligible small business concern that—

(A)

intends to enter into an agreement with a Federal laboratory or federally funded research and development center for portions of the activities to be performed under that award; or

(B)

has entered into a cooperative research and development agreement (as defined in section 12(d) of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710a(d))) with a Federal laboratory.

(2)

Prohibition

No Federal agency shall—

(A)

condition an SBIR or STTR award upon entering into agreement with any Federal laboratory or any federally funded laboratory or research and development center for any portion of the activities to be performed under that award;

(B)

approve an agreement between a small business concern receiving a SBIR or STTR award and a Federal laboratory or federally funded laboratory or research and development center, if the small business concern performs a lesser portion of the activities to be performed under that award than required by this section and by the SBIR Policy Directive and the STTR Policy Directive of the Administrator; or

(C)

approve an agreement that violates any provision, including any data rights protections provision, of this section or the SBIR and the STTR Policy Directives.

(3)

Implementation

Not later than 180 days after the date of enactment of this subsection, the Administrator shall modify the SBIR Policy Directive and the STTR Policy Directive issued under this section to ensure that small business concerns—

(A)

have the flexibility to use the resources of the Federal laboratories and federally funded research and development centers; and

(B)

are not mandated to enter into agreement with any Federal laboratory or any federally funded laboratory or research and development center as a condition of an award.

(4)

Advance payment

If a small business concern receiving an award under this section enters into an agreement with a Federal laboratory or federally funded research and development center for portions of the activities to be performed under that award, the Federal laboratory or federally funded research and development center may not require advance payment from the small business concern in an amount greater than the amount necessary to pay for 30 days of such activities.

.

110.

Notice requirement

(a)

SBIR Program

Section 9(g) of the Small Business Act (15 U.S.C. 638(g)) is amended—

(1)

in paragraph (10), by striking and at the end;

(2)

in paragraph (11), by striking the period at the end and inserting ; and; and

(3)

by adding at the end the following:

(12)

provide timely notice to the Administrator of any case or controversy before any Federal judicial or administrative tribunal concerning the SBIR program of the Federal agency.

.

(b)

STTR Program

Section 9(o) of the Small Business Act (15 U.S.C. 638(o)) is amended—

(1)

by striking paragraph (15);

(2)

in paragraph (16), by striking the period at the end and inserting ; and;

(3)

by redesignating paragraph (16) as paragraph (15); and

(4)

by adding at the end the following:

(16)

provide timely notice to the Administrator of any case or controversy before any Federal judicial or administrative tribunal concerning the STTR program of the Federal agency.

.

111.

Additional SBIR and STTR Awards

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(gg)

Additional SBIR and STTR Awards

(1)

Express authority for awarding a sequential Phase II award

A small business concern that receives a Phase II SBIR award or a Phase II STTR award for a project remains eligible to receive one additional Phase II SBIR award or Phase II STTR award for continued work on that project.

(2)

Preventing duplicative awards

The head of a Federal agency shall verify that any activity to be performed with respect to a project with a Phase I or Phase II SBIR or STTR award has not been funded under the SBIR program or STTR program of another Federal agency.

.

II

OUTREACH AND COMMERCIALIZATION INITIATIVES

201.

Technical assistance for awardees

Section 9(q) of the Small Business Act (15 U.S.C. 638(q)) is amended—

(1)

in paragraph (1)—

(A)

by inserting or STTR program after SBIR program; and

(B)

by striking SBIR projects and inserting SBIR or STTR projects;

(2)

in paragraph (2), by striking 3 years and inserting 5 years; and

(3)

in paragraph (3)—

(A)

in subparagraph (A)—

(i)

by inserting or STTR after SBIR; and

(ii)

by striking $4,000 and inserting $5,000;

(B)

by striking subparagraph (B) and inserting the following:

(B)

Phase ii

A Federal agency described in paragraph (1) may—

(i)

provide to the recipient of a Phase II SBIR or STTR award, through a vendor selected under paragraph (2), the services described in paragraph (1), in an amount equal to not more than $5,000 per year; or

(ii)

authorize the recipient of a Phase II SBIR or STTR award to purchase the services described in paragraph (1), in an amount equal to not more than $5,000 per year, which shall be in addition to the amount of the recipient’s award.

; and

(C)

by adding at the end the following:

(C)

Flexibility

In carrying out subparagraphs (A) and (B), each Federal agency shall provide the allowable amounts to a recipient that meets the eligibility requirements under the applicable subparagraph, if the recipient requests to seek technical assistance from an individual or entity other than the vendor selected under paragraph (2) by the Federal agency.

(D)

Limitation

A Federal agency may not—

(i)

use the amounts authorized under subparagraph (A) or (B) unless the vendor selected under paragraph (2) provides the technical assistance to the recipient; or

(ii)

enter a contract with a vendor under paragraph (2) under which the amount provided for technical assistance is based on total number of Phase I or Phase II awards.

.

202.

Commercialization Readiness Program at Department of Defense

(a)

In General

Section 9(y) of the Small Business Act (15 U.S.C. 638(y)) is amended—

(1)

in the subsection heading, by striking Pilot and inserting Readiness;

(2)

by striking Pilot each place that term appears and inserting Readiness;

(3)

in paragraph (1)—

(A)

by inserting or Small Business Technology Transfer Program after Small Business Innovation Research Program; and

(B)

by adding at the end the following: The authority to create and administer a Commercialization Readiness Program under this subsection may not be construed to eliminate or replace any other SBIR program or STTR program that enhances the insertion or transition of SBIR or STTR technologies, including any such program in effect on the date of enactment of the National Defense Authorization Act for Fiscal Year 2006 (Public Law 109–163; 119 Stat. 3136).;

(4)

in paragraph (2), by inserting or Small Business Technology Transfer Program after Small Business Innovation Research Program;

(5)

by striking paragraphs (5) and (6); and

(6)

by inserting after paragraph (4) the following:

(5)

Insertion incentives

For any contract with a value of not less than $100,000,000, the Secretary of Defense is authorized to—

(A)

establish goals for the transition of Phase III technologies in subcontracting plans; and

(B)

require a prime contractor on such a contract to report the number and dollar amount of contracts entered into by that prime contractor for Phase III SBIR or STTR projects.

(6)

Goal for sbir and sttr technology insertion

The Secretary of Defense shall—

(A)

set a goal to increase the number of Phase II SBIR contracts and the number of Phase II STTR contracts awarded by that Secretary that lead to technology transition into programs of record or fielded systems;

(B)

use incentives in effect on the date of enactment of the Creating Jobs Through Small Business Innovation Act of 2011, or create new incentives, to encourage agency program managers and prime contractors to meet the goal under subparagraph (A); and

(C)

include in the annual report to Congress the percentage of contracts described in subparagraph (A) awarded by that Secretary, and information on the ongoing status of projects funded through the Commercialization Readiness Program and efforts to transition these technologies into programs of record or fielded systems.

.

(b)

Technical and Conforming Amendment

Section 9(i)(1) of the Small Business Act (15 U.S.C. 638(i)(1)) is amended by inserting (including awards under subsection (y)) after the number of awards.

203.

Commercialization Readiness Pilot Program for civilian agencies

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(hh)

Pilot Program

(1)

Authorization

The head of each covered Federal agency may allocate not more than 10 percent of the funds allocated to the SBIR program and the STTR program of the covered Federal agency—

(A)

for awards for technology development, testing, evaluation, and commercialization assistance for SBIR and STTR Phase II technologies; or

(B)

to support the progress of research, research and development, and commercialization conducted under the SBIR or STTR programs to Phase III.

(2)

Application by federal agency

(A)

In general

A covered Federal agency may not establish a pilot program unless the covered Federal agency makes a written application to the Administrator, not later than 90 days before the first day of the fiscal year in which the pilot program is to be established, that describes a compelling reason that additional investment in SBIR or STTR technologies is necessary, including unusually high regulatory, systems integration, or other costs relating to development or manufacturing of identifiable, highly promising small business technologies or a class of such technologies expected to substantially advance the mission of the agency.

(B)

Determination

The Administrator shall—

(i)

make a determination regarding an application submitted under subparagraph (A) not later than 30 days before the first day of the fiscal year for which the application is submitted;

(ii)

publish the determination in the Federal Register; and

(iii)

make a copy of the determination and any related materials available to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives.

(3)

Maximum amount of award

The head of a covered Federal agency may not make an award under a pilot program in excess of 3 times the dollar amounts generally established for Phase II awards under subsection (j)(2)(D) or (p)(2)(B)(ix).

(4)

Registration

Any applicant that receives an award under a pilot program shall register with the Administrator in a registry that is available to the public.

(5)

Award Criteria or Consideration

When making an award under this section, the head of a covered Federal agency shall give consideration to whether the technology to be supported by the award is likely to be manufactured in the United States.

(6)

Report

The head of each covered Federal agency shall include in the annual report of the covered Federal agency to the Administrator an analysis of the various activities considered for inclusion in the pilot program of the covered Federal agency and a statement of the reasons why each activity considered was included or not included, as the case may be.

(7)

Termination

The authority to establish a pilot program under this section expires at the end of fiscal year 2014.

(8)

Definitions

In this subsection—

(A)

the term covered Federal agency

(i)

means a Federal agency participating in the SBIR program or the STTR program; and

(ii)

does not include the Department of Defense; and

(B)

the term pilot program means the program established under paragraph (1).

.

204.

Interagency Policy Committee

(a)

Establishment

The Director of the Office of Science and Technology Policy shall establish an Interagency SBIR/STTR Policy Committee.

(b)

Duties

The Interagency SBIR/STTR Policy Committee shall review the following issues and make policy recommendations on ways to improve program effectiveness and efficiency:

(1)

The public and government databases described in section 9(k) of the Small Business Act (15 U.S.C. 638(k)).

(2)

Federal agency flexibility in establishing Phase I and II award sizes, including appropriate criteria for exercising such flexibility.

(3)

Commercialization assistance best practices of Federal agencies with significant potential to be employed by other agencies, and the appropriate steps to achieve that leverage, as well as proposals for new initiatives to address funding gaps that business concerns face after Phase II but before commercialization.

(4)

Developing and incorporating a standard evaluation framework to enable systematic assessment of SBIR and STTR, including through improved tracking of awards and outcomes and development of performance measures for the SBIR program and STTR program of each Federal agency.

(c)

Reports

The Interagency SBIR/STTR Policy Committee shall transmit to the Committee on Science, Space, and Technology and the Committee on Small Business of the House of Representatives and to the Committee on Small Business and Entrepreneurship of the Senate—

(1)

a report on its review and recommendations under subsection (b)(1) not later than 1 year after the date of enactment of this Act;

(2)

a report on its review and recommendations under subsection (b)(2) not later than 18 months after the date of enactment of this Act;

(3)

a report on its review and recommendations under subsection (b)(3) not later than 2 years after the date of enactment of this Act; and

(4)

a report on its review and recommendations under subsection (b)(4) not later than 2 years after the date of enactment of this Act.

205.

Clarifying the definition of Phase III

(a)

Phase III Awards

Section 9(e) of the Small Business Act (15 U.S.C. 638(e)), as amended by this Act, is further amended—

(1)

in paragraph (4)(C), in the matter preceding clause (i), by inserting for work that derives from, extends, or completes efforts made under prior funding agreements under the SBIR program after phase;

(2)

in paragraph (6)(C), in the matter preceding clause (i), by inserting for work that derives from, extends, or completes efforts made under prior funding agreements under the STTR program after phase;

(3)

in paragraph (8), by striking and at the end;

(4)

in paragraph (9), by striking the period at the end and inserting a semicolon; and

(5)

by adding at the end the following:

(10)

the term commercialization means—

(A)

the process of developing products, processes, technologies, or services; and

(B)

the production and delivery of products, processes, technologies, or services for sale (whether by the originating party or by others) to or use by the Federal Government or commercial markets;

.

(b)

Technical and Conforming Amendments

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended—

(1)

in subsection (e)—

(A)

in paragraph (4)(C)(ii), by striking scientific review criteria and inserting merit-based selection procedures;

(B)

in paragraph (9), by striking the second or the third phase and inserting Phase II or Phase III; and

(C)

by adding at the end the following:

(11)

the term Phase I means—

(A)

with respect to the SBIR program, the first phase described in paragraph (4)(A); and

(B)

with respect to the STTR program, the first phase described in paragraph (6)(A);

(12)

the term Phase II means—

(A)

with respect to the SBIR program, the second phase described in paragraph (4)(B); and

(B)

with respect to the STTR program, the second phase described in paragraph (6)(B); and

(13)

the term Phase III means—

(A)

with respect to the SBIR program, the third phase described in paragraph (4)(C); and

(B)

with respect to the STTR program, the third phase described in paragraph (6)(C).

;

(2)

in subsection (j)—

(A)

in paragraph (1)(B), by striking phase two and inserting Phase II;

(B)

in paragraph (2)—

(i)

in subparagraph (B)—

(I)

by striking the third phase each place it appears and inserting Phase III; and

(II)

by striking the second phase and inserting Phase II;

(ii)

in subparagraph (D)—

(I)

by striking the first phase and inserting Phase I; and

(II)

by striking the second phase and inserting Phase II;

(iii)

in subparagraph (F), by striking the third phase and inserting Phase III;

(iv)

in subparagraph (G)—

(I)

by striking the first phase and inserting Phase I; and

(II)

by striking the second phase and inserting Phase II; and

(v)

in subparagraph (H)—

(I)

by striking the first phase and inserting Phase I;

(II)

by striking second phase each place it appears and inserting Phase II; and

(III)

by striking third phase and inserting Phase III; and

(C)

in paragraph (3)—

(i)

in subparagraph (A)—

(I)

by striking the first phase (as described in subsection (e)(4)(A)) and inserting Phase I;

(II)

by striking the second phase (as described in subsection (e)(4)(B)) and inserting Phase II; and

(III)

by striking the third phase (as described in subsection (e)(4)(C)) and inserting Phase III; and

(ii)

in subparagraph (B), by striking second phase and inserting Phase II;

(3)

in subsection (k)—

(A)

by striking first phase each place it appears and inserting Phase I; and

(B)

by striking second phase each place it appears and inserting Phase II;

(4)

in subsection (l)(2)—

(A)

by striking the first phase and inserting Phase I; and

(B)

by striking the second phase and inserting Phase II;

(5)

in subsection (o)(13)—

(A)

in subparagraph (B), by striking second phase and inserting Phase II; and

(B)

in subparagraph (C), by striking third phase and inserting Phase III;

(6)

in subsection (p)—

(A)

in paragraph (2)(B)—

(i)

in clause (vi)—

(I)

by striking the second phase and inserting Phase II; and

(II)

by striking the third phase and inserting Phase III; and

(ii)

in clause (ix)—

(I)

by striking the first phase and inserting Phase I; and

(II)

by striking the second phase and inserting Phase II; and

(B)

in paragraph (3)—

(i)

by striking the first phase (as described in subsection (e)(6)(A)) and inserting Phase I;

(ii)

by striking the second phase (as described in subsection (e)(6)(B)) and inserting Phase II; and

(iii)

by striking the third phase (as described in subsection (e)(6)(C)) and inserting Phase III;

(7)

in subsection (q)(3)(A)—

(A)

in the subparagraph heading, by striking First phase and inserting Phase i; and

(B)

by striking first phase and inserting Phase I;

(8)

in subsection (r)—

(A)

in the subsection heading, by striking Third Phase and inserting Phase III;

(B)

in paragraph (1)—

(i)

in the first sentence—

(I)

by striking for the second phase and inserting for Phase II;

(II)

by striking third phase and inserting Phase III; and

(III)

by striking second phase period and inserting Phase II period; and

(ii)

in the second sentence—

(I)

by striking second phase and inserting Phase II; and

(II)

by striking third phase and inserting Phase III; and

(C)

in paragraph (2), by striking third phase and inserting Phase III; and

(9)

in subsection (u)(2)(B), by striking the first phase and inserting Phase I.

206.

Shortened period for final decisions on proposals and applications

(a)

In General

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended—

(1)

in subsection (g)(4)—

(A)

by inserting (A) after (4);

(B)

by adding and after the semicolon at the end; and

(C)

by adding at the end the following:

(B)

make a final decision on each proposal submitted under the SBIR program—

(i)

not later than 90 days after the date on which the solicitation closes; or

(ii)

if the Administrator authorizes an extension for a solicitation, not later than 180 days after the date on which the solicitation closes;

; and

(2)

in subsection (o)(4)—

(A)

by inserting (A) after (4);

(B)

by adding and after the semicolon at the end; and

(C)

by adding at the end the following:

(B)

make a final decision on each proposal submitted under the STTR program—

(i)

not later than 90 days after the date on which the solicitation closes; or

(ii)

if the Administrator authorizes an extension for a solicitation, not later than 180 days after the date on which the solicitation closes;

.

(b)

NIH Peer Review Process

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(ii)

NIH Peer Review Process

Notwithstanding subsections (g)(4)(B) and (o)(4)(B), the Director of the National Institutes of Health may make an award under the SBIR program or the STTR program of the National Institutes of Health only if the application for the award has undergone technical and scientific peer review under section 492 of the Public Health Service Act (42 U.S.C. 289a).

(jj)

NSF peer review process

Notwithstanding subsections (g)(4)(B) and (o)(4)(B), the Director of the National Science Foundation may make an award under the SBIR program or the STTR program of the National Science Foundation only if the application for the award has undergone the National Science Foundation's technical and scientific peer review process and met all other applicable peer review procedures and guidelines pursuant to the National Science Foundation Act of 1950 (42 U.S.C. 1861, et seq.) and other applicable Federal law.

.

207.

Phase 0 Proof of Concept Partnership pilot program

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(kk)

Phase 0 Proof of Concept Partnership pilot program

(1)

In general

The Director of the National Institutes of Health shall use $10,000,000 of the funds allocated under subsection (n)(1) for a Proof of Concept Partnership pilot program to accelerate the creation of small businesses and the commercialization of research innovations from qualifying institutions. To implement this program, the Director shall award, through a competitive, merit-based process, grants to qualifying institutions. These grants shall only be used to administer Proof of Concept Partnership awards in conformity with this subsection.

(2)

Definitions

In this subsection—

(A)

the term Director means the Director of the National Institutes of Health;

(B)

the term pilot program refers to the Proof of Concept Partnership pilot program; and

(C)

the terms qualifying institution and institution mean a university or other research institution that participates in the National Institutes of Health’s STTR program.

(3)

Proof of concept partnerships

(A)

In general

A Proof of Concept Partnership shall be set up by a qualifying institution to award grants to individual researchers. These grants should provide researchers with the initial investment and the resources to support the proof of concept work and commercialization mentoring needed to translate promising research projects and technologies into a viable company. This work may include technical validations, market research, clarifying intellectual property rights position and strategy and investigating commercial or business opportunities.

(B)

Award guidelines

The administrator of a Proof of Concept Partnership program shall award grants in accordance with the following guidelines:

(i)

The Proof of Concept Partnership shall use a market-focused project management oversight process, including—

(I)

a rigorous, diverse review board comprised of local experts in translational and proof of concept research, including industry, start-up, venture capital, technical, financial, and business experts and university technology transfer officials;

(II)

technology validation milestones focused on market feasibility;

(III)

simple reporting effective at redirecting projects; and

(IV)

the willingness to reallocate funding from failing projects to those with more potential.

(ii)

Not more than $100,000 shall be awarded towards an individual proposal.

(C)

Educational resources and guidance

The administrator of a Proof of Concept Partnership program shall make educational resources and guidance available to researchers attempting to commercialize their innovations.

(4)

Awards

(A)

Size of award

The Director may make awards to a qualifying institution for up to $1,000,000 per year for up to 3 years.

(B)

Award criteria

In determining which qualifying institutions receive pilot program grants, the Director shall consider, in addition to any other criteria the Director determines necessary, the extent to which qualifying institutions—

(i)

have an established and proven technology transfer or commercialization office and have a plan for engaging that office in the program implementation;

(ii)

have demonstrated a commitment to local and regional economic development;

(iii)

are located in diverse geographies and are of diverse sizes;

(iv)

can assemble project management boards comprised of industry, start-up, venture capital, technical, financial, and business experts;

(v)

have an intellectual property rights strategy or office; and

(vi)

demonstrate a plan for sustainability beyond the duration of the funding award.

(5)

Limitations

The funds for the pilot program shall not be used—

(A)

for basic research, but to evaluate the commercial potential of existing discoveries, including—

(i)

proof of concept research or prototype development; and

(ii)

activities that contribute to determining a project’s commercialization path, to include technical validations, market research, clarifying intellectual property rights, and investigating commercial and business opportunities; or

(B)

to fund the acquisition of research equipment or supplies unrelated to commercialization activities.

(6)

Evaluative Report

The Director shall submit to the Committee on Science, Space, and Technology and the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate an evaluative report regarding the activities of the pilot program. The report shall include—

(A)

a detailed description of the institutional and proposal selection process;

(B)

an accounting of the funds used in the pilot program;

(C)

a detailed description of the pilot program, including incentives and activities undertaken by review board experts;

(D)

a detailed compilation of results achieved by the pilot program, including the number of small business concerns included and the number of business packages developed, and the number of projects that progressed into subsequent STTR phases; and

(E)

an analysis of the program’s effectiveness with supporting data.

(7)

Sunset

The pilot program under this subsection shall terminate at the end of fiscal year 2014.

.

III

OVERSIGHT AND EVALUATION

301.

Streamlining annual evaluation requirements

Section 9(b) of the Small Business Act (15 U.S.C. 638(b)) is amended—

(1)

in paragraph (7)—

(A)

by striking “STTR programs, including the data” and inserting the following: “STTR programs, including—

(A)

the data

;

(B)

by striking “(g)(10), (o)(9), and (o)(15), the number” and all that follows through “under each of the SBIR and STTR programs, and a description” and inserting the following: “(g)(8) and (o)(9);

(B)

the number of proposals received from, and the number and total amount of awards to, HUBZone small business concerns and firms with venture capital, hedge fund, or private equity firm investment (including those majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms) under each of the SBIR and STTR programs;

(C)

a description of the extent to which each Federal agency is increasing outreach and awards to firms owned and controlled by women and social or economically disadvantaged individuals under each of the SBIR and STTR programs;

(D)

general information about the implementation of, and compliance with the allocation of funds required under, subsection (dd) for firms owned in majority part by venture capital operating companies, hedge funds, or private equity firms and participating in the SBIR program;

(E)

a detailed description of appeals of Phase III awards and notices of noncompliance with the SBIR Policy Directive and the STTR Policy Directive filed by the Administrator with Federal agencies; and

(F)

a description

; and

(C)

by striking and at the end;

(2)

in paragraph (8), by striking the period at the end and inserting ; and; and

(3)

by inserting after paragraph (8) the following:

(9)

to coordinate the implementation of electronic databases at each of the Federal agencies participating in the SBIR program or the STTR program, including the technical ability of the participating agencies to electronically share data.

.

302.

Data collection from agencies for SBIR

Section 9(g) of the Small Business Act (15 U.S.C. 638(g)), as amended by this Act, is further amended—

(1)

by striking paragraph (10);

(2)

by redesignating paragraphs (8) and (9) as paragraphs (9) and (10), respectively; and

(3)

by inserting after paragraph (7) the following:

(8)

collect annually, and maintain in a common format in accordance with the simplified reporting requirements under subsection (v), such information from awardees as is necessary to assess the SBIR program, including information necessary to maintain the database described in subsection (k), including—

(A)

whether an awardee—

(i)

has venture capital, hedge fund, or private equity firm investment or is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms, and, if so—

(I)

the amount of venture capital, hedge fund, or private equity firm investment that the awardee has received as of the date of the award; and

(II)

the amount of additional capital that the awardee has invested in the SBIR technology;

(ii)

has an investor that—

(I)

is an individual who is not a citizen of the United States or a lawful permanent resident of the United States, and if so, the name of any such individual; or

(II)

is a person that is not an individual and is not organized under the laws of a State or the United States, and if so the name of any such person;

(iii)

is owned by a woman or has a woman as a principal investigator;

(iv)

is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator;

(v)

is a faculty member or a student of an institution of higher education, as that term is defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001); or

(vi)

is located in a State described in subsection (u)(3); and

(B)

a justification statement from the agency, if an awardee receives an award in an amount that is more than the award guidelines under this section;

.

303.

Data collection from agencies for STTR

Section 9(o) of the Small Business Act (15 U.S.C. 638(o)), as amended by this Act, is further amended by striking paragraph (9) and inserting the following:

(9)

collect annually, and maintain in a common format in accordance with the simplified reporting requirements under subsection (v), such information from applicants and awardees as is necessary to assess the STTR program outputs and outcomes, including information necessary to maintain the database described in subsection (k), including—

(A)

whether an applicant or awardee—

(i)

has venture capital, hedge fund, or private equity firm investment or is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms, and, if so—

(I)

the amount of venture capital, hedge fund, or private equity firm investment that the applicant or awardee has received as of the date of the application or award, as applicable; and

(II)

the amount of additional capital that the applicant or awardee has invested in the SBIR technology;

(ii)

has an investor that—

(I)

is an individual who is not a citizen of the United States or a lawful permanent resident of the United States, and if so, the name of any such individual; or

(II)

is a person that is not an individual and is not organized under the laws of a State or the United States, and if so the name of any such person;

(iii)

is owned by a woman or has a woman as a principal investigator;

(iv)

is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator;

(v)

is a faculty member or a student of an institution of higher education, as that term is defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001); or

(vi)

is located in a State in which the total value of contracts awarded to small business concerns under all STTR 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 2008, based on the most recent statistics compiled by the Administrator; and

(B)

if an awardee receives an award in an amount that is more than the award guidelines under this section, a statement from the agency that justifies the award amount;

.

304.

Public database

Section 9(k)(1) of the Small Business Act (15 U.S.C. 638(k)(1)) is amended—

(1)

in subparagraph (D), by striking and at the end;

(2)

in subparagraph (E), by striking the period at the end and inserting ; and; and

(3)

by adding at the end the following:

(F)

for each small business concern that has received a Phase I or Phase II SBIR or STTR award from a Federal agency, whether the small business concern—

(i)

has venture capital, hedge fund, or private equity firm investment and, if so, whether the small business concern is registered as majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms as required under subsection (dd)(3);

(ii)

is owned by a woman or has a woman as a principal investigator;

(iii)

is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator; or

(iv)

is owned by a faculty member or a student of an institution of higher education, as that term is defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001).

.

305.

Government database

Section 9(k) of the Small Business Act (15 U.S.C. 638(k)) is amended—

(1)

in paragraph (2)—

(A)

in the matter preceding subparagraph (A), by striking Not later and all that follows through Act of 2000 and inserting Not later than 90 days after the date of enactment of the Creating Jobs Through Small Business Innovation Act of 2011;

(B)

by striking subparagraph (C);

(C)

by redesignating subparagraphs (A) and (B) as subparagraphs (B) and (C), respectively;

(D)

by inserting before subparagraph (B), as so redesignated, the following:

(A)

contains, for each small business concern that applies for, submits a proposal for, or receives an award under Phase I or Phase II of the SBIR program or the STTR program—

(i)

the name, size, and location, and an identifying number assigned by the Administration of the small business concern;

(ii)

an abstract of the project;

(iii)

the specific aims of the project;

(iv)

the number of employees of the small business concern;

(v)

the names and titles of the key individuals that will carry out the project, the position each key individual holds in the small business concern, and contact information for each key individual;

(vi)

the percentage of effort each individual described in clause (iv) will contribute to the project;

(vii)

whether the small business concern is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms; and

(viii)

the Federal agency to which the application is made, and contact information for the person or office within the Federal agency that is responsible for reviewing applications and making awards under the SBIR program or the STTR program;

;

(E)

by redesignating subparagraphs (D) and (E) as subparagraphs (E) and (F), respectively;

(F)

by inserting after subparagraph (C), as so redesignated, the following:

(D)

includes, for each awardee—

(i)

the name, size, location, and any identifying number assigned to the awardee by the Administrator;

(ii)

whether the awardee has venture capital, hedge fund, or private equity firm investment, and, if so—

(I)

the amount of venture capital, hedge fund, or private equity firm investment as of the date of the award;

(II)

the percentage of ownership of the awardee held by a venture capital operating company, hedge fund, or private equity firm, including whether the awardee is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms; and

(III)

the amount of additional capital that the awardee has invested in the SBIR technology, which information shall be collected on an annual basis;

(iii)

the names and locations of any affiliates of the awardee;

(iv)

the number of employees of the awardee;

(v)

the number of employees of the affiliates of the awardee; and

(vi)

the names of, and the percentage of ownership of the awardee held by—

(I)

any individual who is not a citizen of the United States or a lawful permanent resident of the United States; or

(II)

any person that is not an individual and is not organized under the laws of a State or the United States;

;

(G)

in subparagraph (E), as so redesignated, by striking and at the end;

(H)

in subparagraph (F), as so redesignated, by striking the period at the end and inserting ; and; and

(I)

by adding at the end the following:

(G)

includes a timely and accurate list of any individual or small business concern that has participated in the SBIR program or STTR program that has been—

(i)

convicted of a fraud-related crime involving funding received under the SBIR program or STTR program; or

(ii)

found civilly liable for a fraud-related violation involving funding received under the SBIR program or STTR program.

; and

(2)

in paragraph (3), by adding at the end the following:

(C)

Government database

Not later than 60 days after the date established by a Federal agency for submitting applications or proposals for a Phase I or Phase II award under the SBIR program or STTR program, the head of the Federal agency shall submit to the Administrator the data required under paragraph (2) with respect to each small business concern that applies or submits a proposal for the Phase I or Phase II award.

.

306.

Accuracy in funding base calculations

(a)

In General

Not later than 1 year after the date of enactment of this Act, and every year thereafter until the date that is 5 years after the date of enactment of this Act, the Comptroller General of the United States shall—

(1)

conduct a fiscal and management audit of the SBIR program and the STTR program for the applicable period to—

(A)

determine whether Federal agencies comply with the expenditure amount requirements under subsections (f)(1) and (n)(1) of section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act;

(B)

assess the extent of compliance with the requirements of section 9(i)(2) of the Small Business Act (15 U.S.C. 638(i)(2)) by Federal agencies participating in the SBIR program or the STTR program and the Administration; and

(C)

determine the portion of the extramural research or research and development budget of a Federal agency that each Federal agency spends for administrative purposes relating to the SBIR program or STTR program, and for what specific purposes, including the portion, if any, of such budget the Federal agency spends for salaries and expenses, travel to visit applicants, outreach events, marketing, and technical assistance; and

(2)

submit a report to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives regarding the audit conducted under paragraph (1), including the assessments required under subparagraph (B), and the determination made under subparagraph (C) of paragraph (1).

(b)

Definition of Applicable Period

In this section, the term applicable period means—

(1)

for the first report submitted under this section, the period beginning on October 1, 2005, and ending on September 30 of the last full fiscal year before the date of enactment of this Act for which information is available; and

(2)

for the second and each subsequent report submitted under this section, the period—

(A)

beginning on October 1 of the first fiscal year after the end of the most recent full fiscal year relating to which a report under this section was submitted; and

(B)

ending on September 30 of the last full fiscal year before the date of the report.

307.

Continued evaluation by the National Academy of Sciences

Section 108 of the Small Business Reauthorization Act of 2000 (15 U.S.C. 638 note) is amended by adding at the end the following:

(e)

Extensions and enhancements of authority

(1)

In general

Not later than 6 months after the date of enactment of the Creating Jobs Through Small Business Innovation Act of 2011, the head of each agency described in subsection (a), in consultation with the Small Business Administration, shall cooperatively enter into an agreement with the National Academy of Sciences for the National Research Council to, not later than 4 years after the date of enactment of the Creating Jobs Through Small Business Innovation Act of 2011, and every 4 years thereafter—

(A)

continue the most recent study under this section relating to the issues described in subparagraphs (A), (B), (C), and (E) of subsection (a)(1);

(B)

conduct a comprehensive study of how the STTR program has stimulated technological innovation and technology transfer, including—

(i)

a review of the collaborations created between small businesses and research institutions, including an evaluation of the effectiveness of the program in stimulating new collaborations and any obstacles that may prevent or inhibit the creation of such collaborations;

(ii)

an evaluation of the effectiveness of the program at transferring technology and capabilities developed through Federal funding;

(iii)

an evaluation of the program’s success at commercializing technologies compared with other Federal technology transfer programs and the SBIR program;

(iv)

to the extent practicable, an evaluation of the economic benefits achieved by the STTR program, including the economic rate of return;

(v)

an analysis of how Federal agencies are using small businesses that have completed Phase II under the STTR program to fulfill their procurement needs; and

(vi)

an analysis of whether the existing STTR allocation has impacted the effectiveness of the program in achieving its goals;

(C)

make recommendations with respect to the issues described in subparagraph (A), (D), and (E) of subsection (a)(2) and subparagraph (B) of this paragraph; and

(D)

estimate, to the extent practicable, the number of jobs created by the SBIR program or STTR program of the agency.

(2)

Consultation

An agreement under paragraph (1) shall require the National Research Council to ensure that there is participation by and consultation with the small business community, the Administration, and other interested parties as described in subsection (b).

(3)

Reporting

An agreement under paragraph (1) shall require that—

(A)

not later than 4 years after the date of enactment of the Creating Jobs Through Small Business Innovation Act of 2011, and every 4 years thereafter, the National Research Council shall submit to the head of the agency entering into the agreement, the Committee on Small Business and Entrepreneurship of the Senate, and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives, a report regarding the study conducted under paragraph (1) and containing the recommendations described in paragraph (1); and

(B)

not later than 2 years after the date of enactment of the Creating Jobs Through Small Business Innovation Act of 2011, the National Research Council shall submit to the head of the agency entering into the agreement, the Committee on Small Business and Entrepreneurship of the Senate, and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives, a report of preliminary findings and recommendations regarding the study conducted under paragraph (1)(B).

.

308.

Technology insertion reporting requirements

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(ll)

Phase III Reporting

The annual SBIR or STTR report to Congress by the Administration under subsection (b)(7) shall include, for each Phase III award made by the Federal agency—

(1)

the name of the agency or component of the agency or the non-Federal source of capital making the Phase III award;

(2)

the name of the small business concern or individual receiving the Phase III award; and

(3)

the dollar amount of the Phase III award.

.

309.

Obtaining consent from SBIR and STTR applicants to release contact information to economic development organizations

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(mm)

Consent To Release Contact Information to Organizations

(1)

Enabling concern to give consent

Each Federal agency required by this section to conduct an SBIR program or an STTR program shall enable a small business concern that is an SBIR applicant or an STTR applicant to indicate to the Federal agency whether the Federal agency has the consent of the concern to—

(A)

identify the concern to appropriate local and State-level economic development organizations as an SBIR applicant or an STTR applicant; and

(B)

release the contact information of the concern to such organizations.

(2)

Rules

The Administrator shall establish rules to implement this subsection. The rules shall include a requirement that a Federal agency include in the SBIR and STTR application a provision through which the applicant can indicate consent for purposes of paragraph (1).

.

310.

Pilot to allow funding for administrative, oversight, and contract processing costs

(a)

In General

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(nn)

Assistance for Administrative, Oversight, and Contract Processing Costs

(1)

In general

Subject to paragraph (2), for the 3 full fiscal years beginning after the date of enactment of this subsection, the Administrator shall allow each Federal agency required to conduct an SBIR program to use not more than 3 percent of the funds allocated to the SBIR program of the Federal agency for—

(A)

the administration of the SBIR program or the STTR program of the Federal agency;

(B)

the provision of outreach and technical assistance relating to the SBIR program or STTR program of the Federal agency, including technical assistance site visits and personnel interviews;

(C)

the implementation of commercialization and outreach initiatives that were not in effect on the date of enactment of this subsection;

(D)

carrying out the program under subsection (y);

(E)

activities relating to oversight and congressional reporting, including waste, fraud, and abuse prevention activities;

(F)

targeted reviews of recipients of awards under the SBIR program or STTR program of the Federal agency that the head of the Federal agency determines are at high risk for fraud, waste, or abuse, to ensure compliance with requirements of the SBIR program or STTR program, respectively;

(G)

the implementation of oversight and quality control measures, including verification of reports and invoices and cost reviews;

(H)

carrying out subsection (dd);

(I)

carrying out subsection (hh);

(J)

contract processing costs relating to the SBIR program or STTR program of the Federal agency; and

(K)

funding for additional personnel and assistance with application reviews.

(2)

Performance criteria

A Federal agency may not use funds as authorized under paragraph (1) until after the effective date of performance criteria, which the Administrator shall establish, to measure any benefits of using funds as authorized under paragraph (1) and to assess continuation of the authority under paragraph (1).

(3)

Rules

Not later than 180 days after the date of enactment of this subsection, the Administrator shall issue rules to carry out this subsection.

(4)

Coordination with IG

Each Federal agency shall coordinate the activities funded under subparagraph (E), (F), or (G) of paragraph (1) with their respective Inspectors General, when appropriate, and each Federal agency that allocates more than $50,000,000 to the SBIR program of the Federal agency for a fiscal year may share such funding with its Inspector General when the Inspector General performs such activities.

.

(b)

Technical and Conforming Amendments

(1)

In general

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended—

(A)

in subsection (f)(2), by striking shall not and all that follows through make available for the purpose and inserting shall not make available for the purpose; and

(B)

in subsection (y)—

(i)

by striking paragraph (4); and

(ii)

by redesignating paragraphs (5) and (6) as paragraphs (4) and (5), respectively.

(2)

Transitional rule

Notwithstanding the amendments made by paragraph (1), subsection (f)(2) and (y)(4) of section 9 of the Small Business Act (15 U.S.C. 638), as in effect on the day before the date of enactment of this Act, shall continue to apply to each Federal agency until the effective date of the performance criteria established by the Administrator under subsection (nn)(2) of section 9 of the Small Business Act, as added by subsection (a).

(3)

Prospective repeal

Effective on the first day of the fourth full fiscal year following the date of enactment of this Act, section 9 of the Small Business Act (15 U.S.C. 638), as amended by paragraph (1) of this section, is amended—

(A)

in subsection (f)(2), by striking “shall not make available for the purpose” and inserting the following: “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

; and

(B)

in subsection (y)—

(i)

by redesignating paragraphs (4) and (5) as paragraphs (5) and (6), respectively; and

(ii)

by inserting after paragraph (3) the following:

(4)

Funding

(A)

In general

The Secretary of Defense and each Secretary of a military department may use not more than an amount equal to 1 percent of the funds available to the Department of Defense or the military department pursuant to the Small Business Innovation Research Program for payment of expenses incurred to administer the Commercialization Pilot Program under this subsection.

(B)

Limitations

The funds described in subparagraph (A)—

(i)

shall not be subject to the limitations on the use of funds in subsection (f)(2); and

(ii)

shall not be used to make Phase III awards.

.

311.

GAO study with respect to venture capital operating company, hedge fund, and private equity firm involvement

Not later than 2 years after the date of enactment of this Act, and every 2 years thereafter, the Comptroller General of the United States shall—

(1)

conduct a study of the impact of requirements relating to venture capital operating company, hedge fund, and private equity firm involvement under section 9 of the Small Business Act; and

(2)

submit to Congress a report regarding the study conducted under paragraph (1).

312.

Reducing vulnerability of SBIR and STTR programs to fraud, waste, and abuse

(a)

Fraud, Waste, and Abuse Prevention

(1)

Amendments required for fraud, waste, and abuse prevention

Not later than 90 days after the date of enactment of this Act, the Administrator shall amend the SBIR Policy Directive and the STTR Policy Directive to include measures to prevent fraud, waste, and abuse in the SBIR program and the STTR program.

(2)

Content of amendments

The amendments required under paragraph (1) shall include—

(A)

definitions or descriptions of fraud, waste, and abuse;

(B)

guidelines for the monitoring and oversight of applicants to and recipients of awards under the SBIR program or the STTR program;

(C)

a requirement that each Federal agency that participates in the SBIR program or STTR program include information concerning the method established by the Inspector General of the Federal agency to report fraud, waste, and abuse (including any telephone hotline or Web-based platform)—

(i)

on the website of the Federal agency; and

(ii)

in any solicitation or notice of funding opportunity issued by the Federal agency for the SBIR program or the STTR program; and

(D)

a requirement that each applicant for and small business concern that receives funding under the SBIR program or the STTR program shall certify whether the applicant or small business concern is in compliance with the laws relating to the SBIR program and the STTR program and the conduct guidelines established under the SBIR Policy Directive and the STTR Policy Directive.

(3)

Consultation

The Administrator shall develop the certification required under paragraph (2)(D) in cooperation with the Council of Inspectors General on Integrity and Efficiency and the Office of Advocacy of the Administration.

(4)

Inspectors General

The Inspector General of each Federal agency that participates in the SBIR program or STTR program shall cooperate to prevent fraud, waste, and abuse in the SBIR program and the STTR program by—

(A)

establishing fraud detection indicators;

(B)

reviewing regulations and operating procedures of the Federal agency;

(C)

coordinating information sharing between Federal agencies, to the extent otherwise permitted under Federal law; and

(D)

improving the education and training of, and outreach to—

(i)

administrators of the SBIR program and the STTR program of the Federal agency;

(ii)

applicants to the SBIR program or the STTR program; and

(iii)

recipients of awards under the SBIR program or the STTR program.

(b)

Study and Report

Not later than 1 year after the date of enactment of this Act to establish a baseline of changes made to the program to fight fraud, waste, and abuse, and every 3 years thereafter to evaluate the effectiveness of the agency strategies, the Comptroller General of the United States shall—

(1)

conduct a study that evaluates—

(A)

the implementation by each Federal agency that participates in the SBIR program or the STTR program of the amendments to the SBIR Policy Directive and the STTR Policy Directive made pursuant to subsection (a);

(B)

the effectiveness of the management information system of each Federal agency that participates in the SBIR program or STTR program in identifying duplicative SBIR and STTR projects;

(C)

the effectiveness of the risk management strategies of each Federal agency that participates in the SBIR program or STTR program in identifying areas of the SBIR program or the STTR program that are at high risk for fraud;

(D)

technological tools that may be used to detect patterns of behavior that may indicate fraud by applicants to the SBIR program or the STTR program;

(E)

the success of each Federal agency that participates in the SBIR program or STTR program in reducing fraud, waste, and abuse in the SBIR program or the STTR program of the Federal agency; and

(F)

the extent to which the Inspector General of each Federal agency that participates in the SBIR and STTR program effectively conducts investigations, audits, inspections, and outreach relating to the SBIR and STTR programs of the Federal agency; and

(2)

submit to the Committee on Small Business and Entrepreneurship of the Senate, the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives, and the head of each Federal agency that participates in the SBIR program or STTR program a report on the results of the study conducted under subparagraph (A).

313.

Simplified paperwork requirements

Section 9(v) of the Small Business Act (15 U.S.C. 638(v)) is amended—

(1)

in the subsection heading, by striking Simplified Reporting Requirements and inserting Reducing Paperwork and Compliance Burden;

(2)

by striking The Administrator and inserting the following:

(1)

Standardization of reporting requirements

The Administrator

; and

(3)

by adding at the end the following:

(2)

Simplification of application and award process

Not later than one year after the date of enactment of this paragraph, and after a period of public comment, the Administrator shall issue regulations or guidelines, taking into consideration the unique needs of each Federal agency, to ensure that each Federal agency required to carry out an SBIR program or STTR program simplifies and standardizes the program proposal, selection, contracting, compliance, and audit procedures for the SBIR program or STTR program of the Federal agency (including procedures relating to overhead rates for applicants and documentation requirements) to reduce the paperwork and regulatory compliance burden on small business concerns applying to and participating in the SBIR program or STTR program.

.

314.

Reducing fraud, waste, and abuse

Not later than 4 years after the date of enactment of this Act, and every 4 years thereafter, the Comptroller General of the United States shall—

(1)

conduct a study of the effectiveness of the government and public databases described in section 9(k) of the Small Business Act (15 U.S.C. 638(k)) in reducing vulnerabilities of the SBIR program and the STTR program to fraud, waste, and abuse, particularly with respect to Federal agencies funding duplicative proposals and business concerns falsifying information in proposals;

(2)

make recommendations with respect to the issues described in paragraph (1); and

(3)

submit to the head of each agency described in section 108(a) of the Small Business Reauthorization Act of 2000 (15 U.S.C. 638 note), the Committee on Small Business and Entrepreneurship of the Senate, and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives a report regarding the study conducted under paragraph (1) and containing the recommendations described in paragraph (2).

IV

POLICY DIRECTIVES

401.

Conforming amendments to the SBIR and the STTR Policy Directives

(a)

In General

Not later than 180 days after the date of enactment of this Act, the Administrator shall promulgate amendments to the SBIR Policy Directive and the STTR Policy Directive to conform such directives to this Act and the amendments made by this Act.

(b)

Publishing SBIR Policy Directive and the STTR Policy Directive in the Federal Register

Not later than 180 days after the date of enactment of this Act, the Administrator shall publish the amended SBIR Policy Directive and the amended STTR Policy Directive in the Federal Register.

V

OTHER PROVISIONS

501.

Report on SBIR and STTR program goals

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(oo)

Annual Report on SBIR and STTR Program Goals

(1)

Development of metrics

The head of each Federal agency required to participate in the SBIR program or the STTR program shall develop metrics to evaluate the effectiveness, and the benefit to the people of the United States, of the SBIR program and the STTR program of the Federal agency that—

(A)

are science-based and statistically driven;

(B)

reflect the mission of the Federal agency; and

(C)

include factors relating to the economic impact of the programs.

(2)

Evaluation

The head of each Federal agency described in paragraph (1) shall conduct an annual evaluation using the metrics developed under paragraph (1) of—

(A)

the SBIR program and the STTR program of the Federal agency; and

(B)

the benefits to the people of the United States of the SBIR program and the STTR program of the Federal agency.

(3)

Report

(A)

In general

The head of each Federal agency described in paragraph (1) shall submit to the appropriate committees of Congress and the Administrator an annual report describing in detail the results of an evaluation conducted under paragraph (2).

(B)

Public availability of report

The head of each Federal agency described in paragraph (1) shall make each report submitted under subparagraph (A) available to the public online.

(C)

Definition

In this paragraph, the term appropriate committees of Congress means—

(i)

the Committee on Small Business and Entrepreneurship of the Senate; and

(ii)

the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives.

.

502.

Competitive selection procedures for SBIR and STTR programs

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(pp)

Competitive Selection Procedures for SBIR and STTR Programs

All funds awarded, appropriated, or otherwise made available in accordance with subsection (f) or (n) must be awarded pursuant to competitive and merit-based selection procedures.

.

503.

Loan restrictions

(a)

Rule required

For purposes of section 9 of the Small Business Act (15 U.S.C. 638), the Administrator shall promulgate a rule not later than 180 days after the date of enactment of this Act that determines what restrictions, conditions, or covenants contained in a note, bond, debenture, other evidence of indebtedness, or preferred stock constitute affiliation for purposes of section 121.103(a) of title 13, Code of Federal Regulations, as in effect on January 1, 2011.

(b)

Failure to promulgate

If the Administrator fails to promulgate a rule in the time period required under subsection (a), the holder of a note, bond, debenture, other evidence of indebtedness, or preferred stock shall be considered to be affiliated with the debtor or issuer of the preferred stock until such time as the Administrator promulgates the rule required under subsection (a).

504.

Program diversification

Federal agencies shall encourage applications under the SBIR and STTR programs (to the extent that the projects relate to the mission of the Federal agency) from—

(1)

small business concerns in geographic areas underrepresented in the SBIR and STTR programs or located in rural areas (as defined in section 1393(a)(2) of the Internal Revenue Code of 1986);

(2)

small business concerns owned and controlled by women;

(3)

small business concerns owned and controlled by veterans;

(4)

small business concerns owned and controlled by minorities;

(5)

small business concerns owned and controlled by people with disabilities; and

(6)

small business concerns located in a geographic area with an unemployment rate that exceeds the national unemployment rate, based on the most recently available monthly publications of the Bureau of Labor Statistics of the Department of Labor.

1.

Short title

This Act may be cited as the Creating Jobs Through Small Business Innovation Act of 2011.

2.

Table of contents

The table of contents for this Act is as follows:

Sec. 1. Short title.

Sec. 2. Table of contents.

Sec. 3. Definitions.

Title I—REAUTHORIZATION OF THE SBIR AND STTR PROGRAMS

Sec. 101. Extension of termination dates.

Sec. 102. SBIR and STTR award levels.

Sec. 103. Agency and program flexibility.

Sec. 104. Elimination of Phase II invitations.

Sec. 105. Phase flexibility.

Sec. 106. Participation by firms with substantial investment from multiple venture capital operating companies, hedge funds, or private equity firms in a portion of the SBIR program.

Sec. 107. Ensuring that innovative small businesses with substantial investment from venture capital operating companies, hedge funds, or private equity firms are able to participate in the SBIR and STTR programs.

Sec. 108. SBIR and STTR special acquisition preference.

Sec. 109. Collaborating with Federal laboratories and research and development centers.

Sec. 110. Notice requirement.

Sec. 111. Additional SBIR and STTR Awards.

Title II—OUTREACH AND COMMERCIALIZATION INITIATIVES

Sec. 201. Technical assistance for awardees.

Sec. 202. Commercialization Readiness Program at Department of Defense.

Sec. 203. Commercialization Readiness Pilot Program for civilian agencies.

Sec. 204. Interagency Policy Committee.

Sec. 205. Clarifying the definition of Phase III.

Sec. 206. Shortened period for final decisions on proposals and applications.

Sec. 207. Phase 0 Proof of Concept Partnership pilot program.

Title III—OVERSIGHT AND EVALUATION

Sec. 301. Streamlining annual evaluation requirements.

Sec. 302. Data collection from agencies for SBIR.

Sec. 303. Data collection from agencies for STTR.

Sec. 304. Public database.

Sec. 305. Government database.

Sec. 306. Accuracy in funding base calculations.

Sec. 307. Continued evaluation by the National Academy of Sciences.

Sec. 308. Technology insertion reporting requirements.

Sec. 309. Obtaining consent from SBIR and STTR applicants to release contact information to economic development organizations.

Sec. 310. Pilot to allow funding for administrative, oversight, and contract processing costs.

Sec. 311. GAO study with respect to venture capital operating company, hedge fund, and private equity firm involvement.

Sec. 312. Reducing vulnerability of SBIR and STTR programs to fraud, waste, and abuse.

Sec. 313. Simplified paperwork requirements.

Sec. 314. Reducing fraud, waste, and abuse.

Title IV—POLICY DIRECTIVES

Sec. 401. Conforming amendments to the SBIR and the STTR Policy Directives.

Title V—OTHER PROVISIONS

Sec. 501. Report on SBIR and STTR program goals.

Sec. 502. Competitive selection procedures for SBIR and STTR programs.

Sec. 503. Loan restrictions.

Sec. 504. Limitation on pilot programs.

Sec. 505. Ensuring equity in SBIR and STTR awards to individual companies.

Sec. 506. Inspector General reports.

Sec. 507. Timing.

Sec. 508. Publication of certain information.

Sec. 509. Preference for clean coal technology research.

Sec. 510. Report on enhancement of manufacturing activities.

Sec. 511. Express authority to fast-track Phase II awards for promising Phase I research.

Sec. 512. Increased partnerships between SBIR awardees and prime contractors, venture capital investment companies, and larger businesses.

Sec. 513. Preference for acid mine drainage research.

Sec. 514. Preference for hydraulic fracturing research.

3.

Definitions

In this Act—

(1)

the terms Administration and Administrator mean the Small Business Administration and the Administrator thereof, respectively;

(2)

the terms extramural budget, Federal agency, Small Business Innovation Research Program, SBIR, Small Business Technology Transfer Program, and STTR have the meanings given such terms in section 9 of the Small Business Act (15 U.S.C. 638); and

(3)

the term small business concern has the meaning given that term under section 3 of the Small Business Act (15 U.S.C. 632).

I

REAUTHORIZATION OF THE SBIR AND STTR PROGRAMS

101.

Extension of termination dates

(a)

SBIR

Section 9(m) of the Small Business Act (15 U.S.C. 638(m)) is amended—

(1)

by striking Termination.— and all that follows through the authorization and inserting Termination.—The authorization;

(2)

by striking 2008 and inserting 2014; and

(3)

by striking paragraph (2).

(b)

STTR

Section 9(n)(1)(A) of the Small Business Act (15 U.S.C. 638(n)(1)(A)) is amended—

(1)

by striking In general.— and all that follows through with respect and inserting In general.—With respect;

(2)

by striking 2009 and inserting 2014; and

(3)

by striking clause (ii).

102.

SBIR and STTR award levels

(a)

SBIR Adjustments

Section 9(j)(2)(D) of the Small Business Act (15 U.S.C. 638(j)(2)(D)) is amended—

(1)

by striking $100,000 and inserting $150,000; and

(2)

by striking $750,000 and inserting $1,000,000.

(b)

STTR Adjustments

Section 9(p)(2)(B)(ix) of the Small Business Act (15 U.S.C. 638(p)(2)(B)(ix)) is amended—

(1)

by striking $100,000 and inserting $150,000; and

(2)

by striking $750,000 and inserting $1,000,000.

(c)

Annual Adjustments

Section 9 of the Small Business Act (15 U.S.C. 638) is amended—

(1)

in subsection (j)(2)(D), by striking once every 5 years to reflect economic adjustments and programmatic considerations and inserting every year for inflation; and

(2)

in subsection (p)(2)(B)(ix), as amended by subsection (b) of this section, by inserting (each of which the Administrator shall adjust for inflation annually) after $1,000,000,.

(d)

Limitation on Size of Awards

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(aa)

Limitation on Size of Awards

(1)

Limitation

No Federal agency may issue an award under the SBIR program or the STTR program if the size of the award exceeds the award guidelines established under this section by more than 50 percent.

(2)

Maintenance of information

Participating agencies shall maintain information on awards exceeding the guidelines established under this section, including—

(A)

the amount of each award;

(B)

a justification for exceeding the award amount;

(C)

the identity and location of each award recipient; and

(D)

whether an award recipient has received any venture capital, hedge fund, or private equity firm investment and, if so, whether the recipient is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms.

(3)

Reports

The Administrator shall include the information described in paragraph (2) in the annual report of the Administrator to Congress.

(4)

Rule of construction

Nothing in this subsection shall be construed to prevent a Federal agency from supplementing an award under the SBIR program or the STTR program using funds of the Federal agency that are not part of the SBIR program or the STTR program of the Federal agency.

.

103.

Agency and program flexibility

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(bb)

Subsequent Phase II Awards

(1)

Agency flexibility

A small business concern that received a Phase I award from a Federal agency under this section shall be eligible to receive a subsequent Phase II award from another Federal agency, if the head of each relevant Federal agency or the relevant component of the Federal agency makes a written determination that the topics of the relevant awards are the same and both agencies report the awards to the Administrator for inclusion in the public database under subsection (k).

(2)

SBIR and sttr program flexibility

A small business concern that received a Phase I award under this section under the SBIR program or the STTR program may receive a subsequent Phase II award in either the SBIR program or the STTR program and the participating agency or agencies shall report the awards to the Administrator for inclusion in the public database under subsection (k).

.

104.

Elimination of Phase II invitations

Section 9(e) of the Small Business Act (15 U.S.C. 638(e)) is amended—

(1)

in paragraph (4)(B), by striking to further and inserting which shall not include any invitation, pre-screening, pre-selection, or down-selection process for eligibility for Phase II, that will further; and

(2)

in paragraph (6)(B), by striking to further develop proposed ideas to and inserting which shall not include any invitation, pre-screening, pre-selection, or down-selection process for eligibility for Phase II, that will further develop proposals that.

105.

Phase flexibility

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(cc)

Phase I required

Under this section, a Federal agency shall provide to a small business concern an award under Phase II of an SBIR program with respect to a project only if such agency finds that the small business concern has been provided an award under Phase I of an SBIR program with respect to such project or has completed the determinations described in subsection (e)(4)(A) with respect to such project despite not having been provided a Phase I award.

.

106.

Participation by firms with substantial investment from multiple venture capital operating companies, hedge funds, or private equity firms in a portion of the SBIR program

(a)

In General

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(dd)

Participation of Small Business Concerns Majority-Owned by Venture Capital Operating Companies, hedge funds, or private equity firms in the SBIR Program

(1)

Authority

Upon a written determination described in paragraph (2) provided to the Administrator, the Committee on Small Business and Entrepreneurship of the Senate, and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives not later than 30 days before the date on which an award is made—

(A)

the Director of the National Institutes of Health, the Secretary of Energy, the Administrator of the National Aeronautics and Space Administration, and the Director of the National Science Foundation may award not more than 45 percent of the funds allocated for the SBIR program of the Federal agency to small business concerns that are owned in majority part by multiple venture capital operating companies, hedge funds, or private equity firms through competitive, merit-based procedures that are open to all eligible small business concerns; and

(B)

the head of a Federal agency other than a Federal agency described in subparagraph (A) that participates in the SBIR program may award not more than 35 percent of the funds allocated for the SBIR program of the Federal agency to small business concerns that are owned in majority part by multiple venture capital operating companies, hedge funds, or private equity firms through competitive, merit-based procedures that are open to all eligible small business concerns.

(2)

Determination

A written determination described in this paragraph is a written determination by the head of a Federal agency that explains how the use of the authority under paragraph (1) will—

(A)

induce additional venture capital, hedge fund, or private equity firm funding of small business innovations;

(B)

substantially contribute to the mission of the Federal agency;

(C)

demonstrate a need for public research; and

(D)

otherwise fulfill the capital needs of small business concerns for additional financing for the SBIR project.

(3)

Registration

A small business concern that is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms and qualified for participation in the program authorized under paragraph (1) shall—

(A)

register with the Administrator on the date that the small business concern submits an application for an award under the SBIR program; and

(B)

indicate in any SBIR proposal that the small business concern is registered under subparagraph (A) as majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms.

(4)

Compliance

(A)

In general

The head of a Federal agency that makes an award under this subsection during a fiscal year shall collect and submit to the Administrator data relating to the number and dollar amount of Phase I awards, Phase II awards, and any other category of awards by the Federal agency under the SBIR program during that fiscal year.

(B)

Annual reporting

The Administrator shall include as part of each annual report by the Administration under subsection (b)(7) any data submitted under subparagraph (A) and a discussion of the compliance of each Federal agency that makes an award under this subsection during the fiscal year with the maximum percentages under paragraph (1).

(5)

Enforcement

If a Federal agency awards more than the percent of the funds allocated for the SBIR program of the Federal agency authorized under paragraph (1) for a purpose described in paragraph (1), the head of the Federal agency shall transfer an amount equal to the amount awarded in excess of the amount authorized under paragraph (1) to the funds for general SBIR programs from the non-SBIR and non-STTR research and development funds of the Federal agency not later than 180 days after the date on which the Federal agency made the award that caused the total awarded under paragraph (1) to be more than the amount authorized under paragraph (1) for a purpose described in paragraph (1).

(6)

Final decisions on applications under the sbir program

(A)

Definition

In this paragraph, the term covered small business concern means a small business concern that—

(i)

was not majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms on the date on which the small business concern submitted an application in response to a solicitation under the SBIR programs; and

(ii)

on the date of the award under the SBIR program is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms.

(B)

In general

If a Federal agency does not make an award under a solicitation under the SBIR program before the date that is 9 months after the date on which the period for submitting applications under the solicitation ends—

(i)

a covered small business concern is eligible to receive the award, without regard to whether the covered small business concern meets the requirements for receiving an award under the SBIR program for a small business concern that is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms, if the covered small business concern meets all other requirements for such an award; and

(ii)

the head of the Federal agency shall transfer an amount equal to any amount awarded to a covered small business concern under the solicitation to the funds for general SBIR programs from the non-SBIR and non-STTR research and development funds of the Federal agency, not later than 90 days after the date on which the Federal agency makes the award.

(7)

Evaluation criteria

A Federal agency may not use investment of venture capital or investment from hedge funds or private equity firms as a criterion for the award of contracts under the SBIR program or STTR program.

.

(b)

Technical and Conforming Amendment

Section 3 of the Small Business Act (15 U.S.C. 632) is amended by adding at the end the following:

(aa)

Venture Capital Operating Company

In this Act, the term venture capital operating company means an entity described in clause (i), (v), or (vi) of section 121.103(b)(5) of title 13, Code of Federal Regulations (or any successor thereto).

(bb)

Hedge fund

In this Act, the term hedge fund has the meaning given that term in section 13(h)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1851(h)(2)).

(cc)

Private equity firm

In this Act, the term private equity firm has the meaning given the term private equity fund in section 13(h)(2) of the Bank Holding Company Act of 1956 (12 U.S.C. 1851(h)(2)).

.

107.

Ensuring that innovative small businesses with substantial investment from venture capital operating companies, hedge funds, or private equity firms are able to participate in the SBIR and STTR programs

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(ee)

Venture capital operating companies, hedge funds, and private equity firms

Effective only for the SBIR and STTR programs the following shall apply:

(1)

A business concern that has more than 500 employees shall not qualify as a small business concern.

(2)

In determining whether a small business concern is independently owned and operated under section 3(a)(1) or meets the small business size standards instituted under section 3(a)(2), the Administrator shall not consider a business concern to be affiliated with a venture capital operating company, hedge fund, or private equity firm (or with any other business that the venture capital operating company, hedge fund, or private equity firm has financed) if—

(A)

the venture capital operating company, hedge fund, or private equity firm does not own 50 percent or more of the business concern; and

(B)

employees of the venture capital operating company, hedge fund, or private equity firm do not constitute a majority of the board of directors of the business concern.

(3)

A business concern shall be deemed to be independently owned and operated if—

(A)

it is owned in majority part by one or more natural persons or venture capital operating companies, hedge funds, or private equity firms;

(B)

there is no single venture capital operating company, hedge fund, or private equity firm that owns 50 percent or more of the business concern; and

(C)

there is no single venture capital operating company, hedge fund, or private equity firm the employees of which constitute a majority of the board of directors of the business concern.

(4)

If a venture capital operating company, hedge fund, or private equity firm controlled by a business with more than 500 employees (in this paragraph referred to as a VCOC, hedge fund, or private equity firm under large business control) has an ownership interest in a small business concern that is owned in majority part by venture capital operating companies, hedge funds, or private equity firms, the small business concern is eligible to receive an award under the SBIR or STTR program only if—

(A)

not more than two VCOCs, hedge funds, or private equity firms under large business control have an ownership interest in the small business concern; and

(B)

the VCOCs, hedge funds, or private equity firms under large business control do not collectively own more than 20 percent of the small business concern.

.

108.

SBIR and STTR special acquisition preference

Section 9(r) of the Small Business Act (15 U.S.C. 638(r)) is amended by adding at the end the following:

(4)

Phase iii awards

To the greatest extent practicable, Federal agencies and Federal prime contractors shall issue Phase III awards relating to technology, including sole source awards, to the SBIR and STTR award recipients that developed the technology.

.

109.

Collaborating with Federal laboratories and research and development centers

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(ff)

Collaborating With Federal Laboratories and Research and Development Centers

(1)

Authorization

Subject to the limitations under this section, the head of each participating Federal agency may make SBIR and STTR awards to any eligible small business concern that—

(A)

intends to enter into an agreement with a Federal laboratory or federally funded research and development center for portions of the activities to be performed under that award; or

(B)

has entered into a cooperative research and development agreement (as defined in section 12(d) of the Stevenson-Wydler Technology Innovation Act of 1980 (15 U.S.C. 3710a(d))) with a Federal laboratory.

(2)

Prohibition

No Federal agency shall—

(A)

condition an SBIR or STTR award upon entering into agreement with any Federal laboratory or any federally funded laboratory or research and development center for any portion of the activities to be performed under that award;

(B)

approve an agreement between a small business concern receiving a SBIR or STTR award and a Federal laboratory or federally funded laboratory or research and development center, if the small business concern performs a lesser portion of the activities to be performed under that award than required by this section and by the SBIR Policy Directive and the STTR Policy Directive of the Administrator; or

(C)

approve an agreement that violates any provision, including any data rights protections provision, of this section or the SBIR and the STTR Policy Directives.

(3)

Implementation

Not later than 180 days after the date of enactment of this subsection, the Administrator shall modify the SBIR Policy Directive and the STTR Policy Directive issued under this section to ensure that small business concerns—

(A)

have the flexibility to use the resources of the Federal laboratories and federally funded research and development centers; and

(B)

are not mandated to enter into agreement with any Federal laboratory or any federally funded laboratory or research and development center as a condition of an award.

(4)

Advance payment

If a small business concern receiving an award under this section enters into an agreement with a Federal laboratory or federally funded research and development center for portions of the activities to be performed under that award, the Federal laboratory or federally funded research and development center may not require advance payment from the small business concern in an amount greater than the amount necessary to pay for 30 days of such activities.

.

110.

Notice requirement

(a)

SBIR Program

Section 9(g) of the Small Business Act (15 U.S.C. 638(g)) is amended—

(1)

in paragraph (10), by striking and at the end;

(2)

in paragraph (11), by striking the period at the end and inserting ; and; and

(3)

by adding at the end the following:

(12)

provide timely notice to the Administrator of any case or controversy before any Federal judicial or administrative tribunal concerning the SBIR program of the Federal agency.

.

(b)

STTR Program

Section 9(o) of the Small Business Act (15 U.S.C. 638(o)) is amended—

(1)

by striking paragraph (15);

(2)

in paragraph (16), by striking the period at the end and inserting ; and;

(3)

by redesignating paragraph (16) as paragraph (15); and

(4)

by adding at the end the following:

(16)

provide timely notice to the Administrator of any case or controversy before any Federal judicial or administrative tribunal concerning the STTR program of the Federal agency.

.

111.

Additional SBIR and STTR Awards

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(gg)

Additional SBIR and STTR Awards

(1)

Express authority for awarding a sequential Phase II award

A small business concern that receives a Phase II SBIR award or a Phase II STTR award for a project remains eligible to receive one additional Phase II SBIR award or Phase II STTR award for continued work on that project.

(2)

Preventing duplicative awards

The head of a Federal agency shall verify that any activity to be performed with respect to a project with a Phase I or Phase II SBIR or STTR award has not been funded under the SBIR program or STTR program of another Federal agency.

.

II

OUTREACH AND COMMERCIALIZATION INITIATIVES

201.

Technical assistance for awardees

Section 9(q) of the Small Business Act (15 U.S.C. 638(q)) is amended—

(1)

in paragraph (1)—

(A)

by inserting or STTR program after SBIR program; and

(B)

by striking SBIR projects and inserting SBIR or STTR projects;

(2)

in paragraph (2), by striking 3 years and inserting 5 years; and

(3)

in paragraph (3)—

(A)

in subparagraph (A)—

(i)

by inserting or STTR after SBIR; and

(ii)

by striking $4,000 and inserting $5,000;

(B)

by striking subparagraph (B) and inserting the following:

(B)

Phase ii

A Federal agency described in paragraph (1) may—

(i)

provide to the recipient of a Phase II SBIR or STTR award, through a vendor selected under paragraph (2), the services described in paragraph (1), in an amount equal to not more than $5,000 per year; or

(ii)

authorize the recipient of a Phase II SBIR or STTR award to purchase the services described in paragraph (1), in an amount equal to not more than $5,000 per year, which shall be in addition to the amount of the recipient’s award.

; and

(C)

by adding at the end the following:

(C)

Flexibility

In carrying out subparagraphs (A) and (B), each Federal agency shall provide the allowable amounts to a recipient that meets the eligibility requirements under the applicable subparagraph, if the recipient requests to seek technical assistance from an individual or entity other than the vendor selected under paragraph (2) by the Federal agency.

(D)

Limitation

A Federal agency may not—

(i)

use the amounts authorized under subparagraph (A) or (B) unless the vendor selected under paragraph (2) provides the technical assistance to the recipient; or

(ii)

enter a contract with a vendor under paragraph (2) under which the amount provided for technical assistance is based on total number of Phase I or Phase II awards.

.

202.

Commercialization Readiness Program at Department of Defense

(a)

In General

Section 9(y) of the Small Business Act (15 U.S.C. 638(y)) is amended—

(1)

in the subsection heading, by striking Pilot and inserting Readiness;

(2)

by striking Pilot each place that term appears and inserting Readiness;

(3)

in paragraph (1)—

(A)

by inserting or Small Business Technology Transfer Program after Small Business Innovation Research Program; and

(B)

by adding at the end the following: The authority to create and administer a Commercialization Readiness Program under this subsection may not be construed to eliminate or replace any other SBIR program or STTR program that enhances the insertion or transition of SBIR or STTR technologies, including any such program in effect on the date of enactment of the National Defense Authorization Act for Fiscal Year 2006 (Public Law 109–163; 119 Stat. 3136).;

(4)

in paragraph (2), by inserting or Small Business Technology Transfer Program after Small Business Innovation Research Program;

(5)

in paragraph (5)—

(A)

by striking the Committee on Armed Services and the Committee on Small Business of the House of Representatives and inserting the Committee on Armed Services, the Committee on Small Business, and the Committee on Science, Space, and Technology of the House of Representatives; and

(B)

by striking shall include and inserting shall include, in addition to the information described in paragraph (6)(C);

(6)

by redesignating paragraph (5) as paragraph (7);

(7)

by striking paragraph (6); and

(8)

by inserting after paragraph (4) the following:

(5)

Insertion incentives

For any contract with a value of not less than $100,000,000, the Secretary of Defense is authorized to—

(A)

establish goals for the transition of Phase III technologies in subcontracting plans;

(B)

require a prime contractor on such a contract to report the number and dollar amount of contracts entered into by that prime contractor for Phase III SBIR or STTR projects; and

(C)

take action to ensure that, if a prime contractor on such a contract, after consultation with the Secretary, certifies that an appropriate Phase III technology is not available to be incorporated into a project of the prime contractor, such project shall be excluded from any determination of whether goals under subparagraph (A) have been met.

(6)

Goal for sbir and sttr technology insertion

The Secretary of Defense shall—

(A)

set a goal to increase the number of Phase II SBIR contracts and the number of Phase II STTR contracts awarded by that Secretary that lead to technology transition into programs of record or fielded systems;

(B)

use incentives in effect on the date of enactment of the Creating Jobs Through Small Business Innovation Act of 2011, or create new incentives, to encourage agency program managers and prime contractors to meet the goal under subparagraph (A); and

(C)

include in the annual report under this subsection—

(i)

the percentage of Phase II SBIR and STTR contracts awarded by the Secretary that led to technology transition into programs of record or fielded systems;

(ii)

information on the status of each project that received funding through the Commercialization Readiness Program and efforts to transition those projects into programs of record or fielded systems; and

(iii)

a description of each incentive that has been used by the Secretary under subparagraph (B) and the effectiveness of that incentive with respect to meeting the goal under subparagraph (A).

.

(b)

Technical and Conforming Amendment

Section 9(i)(1) of the Small Business Act (15 U.S.C. 638(i)(1)) is amended by inserting (including awards under subsection (y)) after the number of awards.

203.

Commercialization Readiness Pilot Program for civilian agencies

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(hh)

Pilot Program

(1)

Authorization

The head of each covered Federal agency may allocate not more than 10 percent of the funds allocated to the SBIR program and the STTR program of the covered Federal agency—

(A)

for awards for technology development, testing, evaluation, and commercialization assistance for SBIR and STTR Phase II technologies; or

(B)

to support the progress of research, research and development, and commercialization conducted under the SBIR or STTR programs to Phase III.

(2)

Application by federal agency

(A)

In general

A covered Federal agency may not establish a pilot program unless the covered Federal agency makes a written application to the Administrator, not later than 90 days before the first day of the fiscal year in which the pilot program is to be established, that describes a compelling reason that additional investment in SBIR or STTR technologies is necessary, including unusually high regulatory, systems integration, or other costs relating to development or manufacturing of identifiable, highly promising small business technologies or a class of such technologies expected to substantially advance the mission of the agency.

(B)

Determination

The Administrator shall—

(i)

make a determination regarding an application submitted under subparagraph (A) not later than 30 days before the first day of the fiscal year for which the application is submitted;

(ii)

publish the determination in the Federal Register; and

(iii)

make a copy of the determination and any related materials available to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives.

(3)

Maximum amount of award

The head of a covered Federal agency may not make an award under a pilot program in excess of 3 times the dollar amounts generally established for Phase II awards under subsection (j)(2)(D) or (p)(2)(B)(ix).

(4)

Registration

Any applicant that receives an award under a pilot program shall register with the Administrator in a registry that is available to the public.

(5)

Award Criteria or Consideration

When making an award under this section, the head of a covered Federal agency shall give consideration to whether the technology to be supported by the award is likely to be manufactured in the United States.

(6)

Report

The head of each covered Federal agency shall include in the annual report of the covered Federal agency to the Administrator an analysis of the various activities considered for inclusion in the pilot program of the covered Federal agency and a statement of the reasons why each activity considered was included or not included, as the case may be.

(7)

Termination

The authority to establish a pilot program under this section expires at the end of fiscal year 2014.

(8)

Definitions

In this subsection—

(A)

the term covered Federal agency

(i)

means a Federal agency participating in the SBIR program or the STTR program; and

(ii)

does not include the Department of Defense; and

(B)

the term pilot program means the program established under paragraph (1).

.

204.

Interagency Policy Committee

(a)

Establishment

The Director of the Office of Science and Technology Policy shall establish an Interagency SBIR/STTR Policy Committee.

(b)

Duties

The Interagency SBIR/STTR Policy Committee shall review the following issues and make policy recommendations on ways to improve program effectiveness and efficiency:

(1)

The public and government databases described in section 9(k) of the Small Business Act (15 U.S.C. 638(k)).

(2)

Federal agency flexibility in establishing Phase I and II award sizes, including appropriate criteria for exercising such flexibility.

(3)

Commercialization assistance best practices of Federal agencies with significant potential to be employed by other agencies, and the appropriate steps to achieve that leverage, as well as proposals for new initiatives to address funding gaps that business concerns face after Phase II but before commercialization.

(4)

Developing and incorporating a standard evaluation framework to enable systematic assessment of SBIR and STTR, including through improved tracking of awards and outcomes and development of performance measures for the SBIR program and STTR program of each Federal agency.

(c)

Reports

The Interagency SBIR/STTR Policy Committee shall transmit to the Committee on Science, Space, and Technology and the Committee on Small Business of the House of Representatives and to the Committee on Small Business and Entrepreneurship of the Senate—

(1)

a report on its review and recommendations under subsection (b)(1) not later than 1 year after the date of enactment of this Act;

(2)

a report on its review and recommendations under subsection (b)(2) not later than 18 months after the date of enactment of this Act;

(3)

a report on its review and recommendations under subsection (b)(3) not later than 2 years after the date of enactment of this Act; and

(4)

a report on its review and recommendations under subsection (b)(4) not later than 2 years after the date of enactment of this Act.

205.

Clarifying the definition of Phase III

(a)

Phase III Awards

Section 9(e) of the Small Business Act (15 U.S.C. 638(e)), as amended by this Act, is further amended—

(1)

in paragraph (4)(C), in the matter preceding clause (i), by inserting for work that derives from, extends, or completes efforts made under prior funding agreements under the SBIR program after phase;

(2)

in paragraph (6)(C), in the matter preceding clause (i), by inserting for work that derives from, extends, or completes efforts made under prior funding agreements under the STTR program after phase;

(3)

in paragraph (8), by striking and at the end;

(4)

in paragraph (9), by striking the period at the end and inserting a semicolon; and

(5)

by adding at the end the following:

(10)

the term commercialization means—

(A)

the process of developing products, processes, technologies, or services; and

(B)

the production and delivery of products, processes, technologies, or services for sale (whether by the originating party or by others) to or use by the Federal Government or commercial markets;

.

(b)

Technical and Conforming Amendments

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended—

(1)

in subsection (e)—

(A)

in paragraph (4)(C)(ii), by striking scientific review criteria and inserting merit-based selection procedures;

(B)

in paragraph (9), by striking the second or the third phase and inserting Phase II or Phase III; and

(C)

by adding at the end the following:

(11)

the term Phase I means—

(A)

with respect to the SBIR program, the first phase described in paragraph (4)(A); and

(B)

with respect to the STTR program, the first phase described in paragraph (6)(A);

(12)

the term Phase II means—

(A)

with respect to the SBIR program, the second phase described in paragraph (4)(B); and

(B)

with respect to the STTR program, the second phase described in paragraph (6)(B); and

(13)

the term Phase III means—

(A)

with respect to the SBIR program, the third phase described in paragraph (4)(C); and

(B)

with respect to the STTR program, the third phase described in paragraph (6)(C).

;

(2)

in subsection (j)—

(A)

in paragraph (1)(B), by striking phase two and inserting Phase II;

(B)

in paragraph (2)—

(i)

in subparagraph (B)—

(I)

by striking the third phase each place it appears and inserting Phase III; and

(II)

by striking the second phase and inserting Phase II;

(ii)

in subparagraph (D)—

(I)

by striking the first phase and inserting Phase I; and

(II)

by striking the second phase and inserting Phase II;

(iii)

in subparagraph (F), by striking the third phase and inserting Phase III;

(iv)

in subparagraph (G)—

(I)

by striking the first phase and inserting Phase I; and

(II)

by striking the second phase and inserting Phase II; and

(v)

in subparagraph (H)—

(I)

by striking the first phase and inserting Phase I;

(II)

by striking second phase each place it appears and inserting Phase II; and

(III)

by striking third phase and inserting Phase III; and

(C)

in paragraph (3)—

(i)

in subparagraph (A)—

(I)

by striking the first phase (as described in subsection (e)(4)(A)) and inserting Phase I;

(II)

by striking the second phase (as described in subsection (e)(4)(B)) and inserting Phase II; and

(III)

by striking the third phase (as described in subsection (e)(4)(C)) and inserting Phase III; and

(ii)

in subparagraph (B), by striking second phase and inserting Phase II;

(3)

in subsection (k)—

(A)

by striking first phase each place it appears and inserting Phase I; and

(B)

by striking second phase each place it appears and inserting Phase II;

(4)

in subsection (l)(2)—

(A)

by striking the first phase and inserting Phase I; and

(B)

by striking the second phase and inserting Phase II;

(5)

in subsection (o)(13)—

(A)

in subparagraph (B), by striking second phase and inserting Phase II; and

(B)

in subparagraph (C), by striking third phase and inserting Phase III;

(6)

in subsection (p)—

(A)

in paragraph (2)(B)—

(i)

in clause (vi)—

(I)

by striking the second phase and inserting Phase II; and

(II)

by striking the third phase and inserting Phase III; and

(ii)

in clause (ix)—

(I)

by striking the first phase and inserting Phase I; and

(II)

by striking the second phase and inserting Phase II; and

(B)

in paragraph (3)—

(i)

by striking the first phase (as described in subsection (e)(6)(A)) and inserting Phase I;

(ii)

by striking the second phase (as described in subsection (e)(6)(B)) and inserting Phase II; and

(iii)

by striking the third phase (as described in subsection (e)(6)(C)) and inserting Phase III;

(7)

in subsection (q)(3)(A)—

(A)

in the subparagraph heading, by striking First phase and inserting Phase i; and

(B)

by striking first phase and inserting Phase I;

(8)

in subsection (r)—

(A)

in the subsection heading, by striking Third Phase and inserting Phase III;

(B)

in paragraph (1)—

(i)

in the first sentence—

(I)

by striking for the second phase and inserting for Phase II;

(II)

by striking third phase and inserting Phase III; and

(III)

by striking second phase period and inserting Phase II period; and

(ii)

in the second sentence—

(I)

by striking second phase and inserting Phase II; and

(II)

by striking third phase and inserting Phase III; and

(C)

in paragraph (2), by striking third phase and inserting Phase III; and

(9)

in subsection (u)(2)(B), by striking the first phase and inserting Phase I.

206.

Shortened period for final decisions on proposals and applications

(a)

In General

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended—

(1)

in subsection (g)(4)—

(A)

by inserting (A) after (4);

(B)

by adding and after the semicolon at the end; and

(C)

by adding at the end the following:

(B)

make a final decision on each proposal submitted under the SBIR program—

(i)

not later than 90 days after the date on which the solicitation closes; or

(ii)

if the Administrator authorizes an extension for a solicitation, not later than 180 days after the date on which the solicitation closes;

; and

(2)

in subsection (o)(4)—

(A)

by inserting (A) after (4);

(B)

by adding and after the semicolon at the end; and

(C)

by adding at the end the following:

(B)

make a final decision on each proposal submitted under the STTR program—

(i)

not later than 90 days after the date on which the solicitation closes; or

(ii)

if the Administrator authorizes an extension for a solicitation, not later than 180 days after the date on which the solicitation closes;

.

(b)

NIH Peer Review Process

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(ii)

NIH Peer Review Process

Notwithstanding subsections (g)(4)(B) and (o)(4)(B), the Director of the National Institutes of Health may make an award under the SBIR program or the STTR program of the National Institutes of Health only if the application for the award has undergone technical and scientific peer review under section 492 of the Public Health Service Act (42 U.S.C. 289a).

(jj)

NSF peer review process

Notwithstanding subsections (g)(4)(B) and (o)(4)(B), the Director of the National Science Foundation may make an award under the SBIR program or the STTR program of the National Science Foundation only if the application for the award has undergone the National Science Foundation's technical and scientific peer review process and met all other applicable peer review procedures and guidelines pursuant to the National Science Foundation Act of 1950 (42 U.S.C. 1861, et seq.) and other applicable Federal law.

.

207.

Phase 0 Proof of Concept Partnership pilot program

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(kk)

Phase 0 Proof of Concept Partnership pilot program

(1)

In general

The Director of the National Institutes of Health may use $10,000,000 of the funds allocated under subsection (n)(1) for a Proof of Concept Partnership pilot program to accelerate the creation of small businesses and the commercialization of research innovations from qualifying institutions. To implement this program, the Director shall award, through a competitive, merit-based process, grants to qualifying institutions. These grants shall only be used to administer Proof of Concept Partnership awards in conformity with this subsection.

(2)

Definitions

In this subsection—

(A)

the term Director means the Director of the National Institutes of Health;

(B)

the term pilot program refers to the Proof of Concept Partnership pilot program; and

(C)

the terms qualifying institution and institution mean a university or other research institution that participates in the National Institutes of Health’s STTR program.

(3)

Proof of concept partnerships

(A)

In general

A Proof of Concept Partnership shall be set up by a qualifying institution to award grants to individual researchers. These grants should provide researchers with the initial investment and the resources to support the proof of concept work and commercialization mentoring needed to translate promising research projects and technologies into a viable company. This work may include technical validations, market research, clarifying intellectual property rights position and strategy and investigating commercial or business opportunities.

(B)

Award guidelines

The administrator of a Proof of Concept Partnership program shall award grants in accordance with the following guidelines:

(i)

The Proof of Concept Partnership shall use a market-focused project management oversight process, including—

(I)

a rigorous, diverse review board comprised of local experts in translational and proof of concept research, including industry, start-up, venture capital, technical, financial, and business experts and university technology transfer officials;

(II)

technology validation milestones focused on market feasibility;

(III)

simple reporting effective at redirecting projects; and

(IV)

the willingness to reallocate funding from failing projects to those with more potential.

(ii)

Not more than $100,000 shall be awarded towards an individual proposal.

(C)

Educational resources and guidance

The administrator of a Proof of Concept Partnership program shall make educational resources and guidance available to researchers attempting to commercialize their innovations.

(4)

Awards

(A)

Size of award

The Director may make awards to a qualifying institution for up to $1,000,000 per year for up to 3 years.

(B)

Award criteria

In determining which qualifying institutions receive pilot program grants, the Director shall consider, in addition to any other criteria the Director determines necessary, the extent to which qualifying institutions—

(i)

have an established and proven technology transfer or commercialization office and have a plan for engaging that office in the program implementation;

(ii)

have demonstrated a commitment to local and regional economic development;

(iii)

are located in diverse geographies and are of diverse sizes;

(iv)

can assemble project management boards comprised of industry, start-up, venture capital, technical, financial, and business experts;

(v)

have an intellectual property rights strategy or office; and

(vi)

demonstrate a plan for sustainability beyond the duration of the funding award.

(5)

Limitations

The funds for the pilot program shall not be used—

(A)

for basic research, but to evaluate the commercial potential of existing discoveries, including—

(i)

proof of concept research or prototype development; and

(ii)

activities that contribute to determining a project’s commercialization path, to include technical validations, market research, clarifying intellectual property rights, and investigating commercial and business opportunities; or

(B)

to fund the acquisition of research equipment or supplies unrelated to commercialization activities.

(6)

Evaluative Report

The Director shall submit to the Committee on Science, Space, and Technology and the Committee on Small Business of the House of Representatives and the Committee on Small Business and Entrepreneurship of the Senate an evaluative report regarding the activities of the pilot program. The report shall include—

(A)

a detailed description of the institutional and proposal selection process;

(B)

an accounting of the funds used in the pilot program;

(C)

a detailed description of the pilot program, including incentives and activities undertaken by review board experts;

(D)

a detailed compilation of results achieved by the pilot program, including the number of small business concerns included and the number of business packages developed, and the number of projects that progressed into subsequent STTR phases; and

(E)

an analysis of the program’s effectiveness with supporting data.

(7)

Sunset

The pilot program under this subsection shall terminate at the end of fiscal year 2014.

.

III

OVERSIGHT AND EVALUATION

301.

Streamlining annual evaluation requirements

Section 9(b) of the Small Business Act (15 U.S.C. 638(b)) is amended—

(1)

in paragraph (7)—

(A)

by striking “STTR programs, including the data” and inserting the following: “STTR programs, including—

(A)

the data

;

(B)

by striking “(g)(10), (o)(9), and (o)(15), the number” and all that follows through “under each of the SBIR and STTR programs, and a description” and inserting the following: “(g)(8) and (o)(9);

(B)

the number of proposals received from, and the number and total amount of awards to, HUBZone small business concerns and firms with venture capital, hedge fund, or private equity firm investment (including those majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms) under each of the SBIR and STTR programs;

(C)

a description of the extent to which each Federal agency is increasing outreach and awards to firms owned and controlled by women and social or economically disadvantaged individuals under each of the SBIR and STTR programs;

(D)

general information about the implementation of, and compliance with the allocation of funds required under, subsection (dd) for firms owned in majority part by venture capital operating companies, hedge funds, or private equity firms and participating in the SBIR program;

(E)

a detailed description of appeals of Phase III awards and notices of noncompliance with the SBIR Policy Directive and the STTR Policy Directive filed by the Administrator with Federal agencies; and

(F)

a description

; and

(C)

by striking and at the end;

(2)

in paragraph (8), by striking the period at the end and inserting ; and; and

(3)

by inserting after paragraph (8) the following:

(9)

to coordinate the implementation of electronic databases at each of the Federal agencies participating in the SBIR program or the STTR program, including the technical ability of the participating agencies to electronically share data.

.

302.

Data collection from agencies for SBIR

Section 9(g) of the Small Business Act (15 U.S.C. 638(g)), as amended by this Act, is further amended—

(1)

by striking paragraph (10);

(2)

by redesignating paragraphs (8) and (9) as paragraphs (9) and (10), respectively; and

(3)

by inserting after paragraph (7) the following:

(8)

collect annually, and maintain in a common format in accordance with the simplified reporting requirements under subsection (v), such information from awardees as is necessary to assess the SBIR program, including information necessary to maintain the database described in subsection (k), including—

(A)

whether an awardee—

(i)

has venture capital, hedge fund, or private equity firm investment or is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms, and, if so—

(I)

the amount of venture capital, hedge fund, or private equity firm investment that the awardee has received as of the date of the award; and

(II)

the amount of additional capital that the awardee has invested in the SBIR technology;

(ii)

has an investor that—

(I)

is an individual who is not a citizen of the United States or a lawful permanent resident of the United States, and if so, the name of any such individual; or

(II)

is a person that is not an individual and is not organized under the laws of a State or the United States, and if so the name of any such person;

(iii)

is owned by a woman or has a woman as a principal investigator;

(iv)

is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator;

(v)

is a faculty member or a student of an institution of higher education, as that term is defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001); or

(vi)

is located in a State described in subsection (u)(3); and

(B)

a justification statement from the agency, if an awardee receives an award in an amount that is more than the award guidelines under this section;

.

303.

Data collection from agencies for STTR

Section 9(o) of the Small Business Act (15 U.S.C. 638(o)), as amended by this Act, is further amended by striking paragraph (9) and inserting the following:

(9)

collect annually, and maintain in a common format in accordance with the simplified reporting requirements under subsection (v), such information from applicants and awardees as is necessary to assess the STTR program outputs and outcomes, including information necessary to maintain the database described in subsection (k), including—

(A)

whether an applicant or awardee—

(i)

has venture capital, hedge fund, or private equity firm investment or is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms, and, if so—

(I)

the amount of venture capital, hedge fund, or private equity firm investment that the applicant or awardee has received as of the date of the application or award, as applicable; and

(II)

the amount of additional capital that the applicant or awardee has invested in the SBIR technology;

(ii)

has an investor that—

(I)

is an individual who is not a citizen of the United States or a lawful permanent resident of the United States, and if so, the name of any such individual; or

(II)

is a person that is not an individual and is not organized under the laws of a State or the United States, and if so the name of any such person;

(iii)

is owned by a woman or has a woman as a principal investigator;

(iv)

is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator;

(v)

is a faculty member or a student of an institution of higher education, as that term is defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001); or

(vi)

is located in a State in which the total value of contracts awarded to small business concerns under all STTR 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 2008, based on the most recent statistics compiled by the Administrator; and

(B)

if an awardee receives an award in an amount that is more than the award guidelines under this section, a statement from the agency that justifies the award amount;

.

304.

Public database

Section 9(k)(1) of the Small Business Act (15 U.S.C. 638(k)(1)) is amended—

(1)

in subparagraph (D), by striking and at the end;

(2)

in subparagraph (E), by striking the period at the end and inserting ; and; and

(3)

by adding at the end the following:

(F)

for each small business concern that has received a Phase I or Phase II SBIR or STTR award from a Federal agency, whether the small business concern—

(i)

has venture capital, hedge fund, or private equity firm investment and, if so, whether the small business concern is registered as majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms as required under subsection (dd)(3);

(ii)

is owned by a woman or has a woman as a principal investigator;

(iii)

is owned by a socially or economically disadvantaged individual or has a socially or economically disadvantaged individual as a principal investigator; or

(iv)

is owned by a faculty member or a student of an institution of higher education, as that term is defined in section 101 of the Higher Education Act of 1965 (20 U.S.C. 1001).

.

305.

Government database

Section 9(k) of the Small Business Act (15 U.S.C. 638(k)) is amended—

(1)

in paragraph (2)—

(A)

in the matter preceding subparagraph (A), by striking Not later and all that follows through Act of 2000 and inserting Not later than 90 days after the date of enactment of the Creating Jobs Through Small Business Innovation Act of 2011;

(B)

by striking subparagraph (C);

(C)

by redesignating subparagraphs (A) and (B) as subparagraphs (B) and (C), respectively;

(D)

by inserting before subparagraph (B), as so redesignated, the following:

(A)

contains, for each small business concern that applies for, submits a proposal for, or receives an award under Phase I or Phase II of the SBIR program or the STTR program—

(i)

the name, size, and location, and an identifying number assigned by the Administration of the small business concern;

(ii)

an abstract of the project;

(iii)

the specific aims of the project;

(iv)

the number of employees of the small business concern;

(v)

the names and titles of the key individuals that will carry out the project, the position each key individual holds in the small business concern, and contact information for each key individual;

(vi)

the percentage of effort each individual described in clause (iv) will contribute to the project;

(vii)

whether the small business concern is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms; and

(viii)

the Federal agency to which the application is made, and contact information for the person or office within the Federal agency that is responsible for reviewing applications and making awards under the SBIR program or the STTR program;

;

(E)

by redesignating subparagraphs (D) and (E) as subparagraphs (E) and (F), respectively;

(F)

by inserting after subparagraph (C), as so redesignated, the following:

(D)

includes, for each awardee—

(i)

the name, size, location, and any identifying number assigned to the awardee by the Administrator;

(ii)

whether the awardee has venture capital, hedge fund, or private equity firm investment, and, if so—

(I)

the amount of venture capital, hedge fund, or private equity firm investment as of the date of the award;

(II)

the percentage of ownership of the awardee held by a venture capital operating company, hedge fund, or private equity firm, including whether the awardee is majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms; and

(III)

the amount of additional capital that the awardee has invested in the SBIR technology, which information shall be collected on an annual basis;

(iii)

the names and locations of any affiliates of the awardee;

(iv)

the number of employees of the awardee;

(v)

the number of employees of the affiliates of the awardee; and

(vi)

the names of, and the percentage of ownership of the awardee held by—

(I)

any individual who is not a citizen of the United States or a lawful permanent resident of the United States; or

(II)

any person that is not an individual and is not organized under the laws of a State or the United States;

;

(G)

in subparagraph (E), as so redesignated, by striking and at the end;

(H)

in subparagraph (F), as so redesignated, by striking the period at the end and inserting ; and; and

(I)

by adding at the end the following:

(G)

includes a timely and accurate list of any individual or small business concern that has participated in the SBIR program or STTR program that has been—

(i)

convicted of a fraud-related crime involving funding received under the SBIR program or STTR program; or

(ii)

found civilly liable for a fraud-related violation involving funding received under the SBIR program or STTR program.

; and

(2)

in paragraph (3), by adding at the end the following:

(C)

Government database

Not later than 60 days after the date established by a Federal agency for submitting applications or proposals for a Phase I or Phase II award under the SBIR program or STTR program, the head of the Federal agency shall submit to the Administrator the data required under paragraph (2) with respect to each small business concern that applies or submits a proposal for the Phase I or Phase II award.

.

306.

Accuracy in funding base calculations

(a)

In General

Not later than 1 year after the date of enactment of this Act, and every year thereafter until the date that is 5 years after the date of enactment of this Act, the Comptroller General of the United States shall—

(1)

conduct a fiscal and management audit of the SBIR program and the STTR program for the applicable period to—

(A)

determine whether Federal agencies comply with the expenditure amount requirements under subsections (f)(1) and (n)(1) of section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act;

(B)

assess the extent of compliance with the requirements of section 9(i)(2) of the Small Business Act (15 U.S.C. 638(i)(2)) by Federal agencies participating in the SBIR program or the STTR program and the Administration; and

(C)

determine the portion of the extramural research or research and development budget of a Federal agency that each Federal agency spends for administrative purposes relating to the SBIR program or STTR program, and for what specific purposes, including the portion, if any, of such budget the Federal agency spends for salaries and expenses, travel to visit applicants, outreach events, marketing, and technical assistance; and

(2)

submit a report to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives regarding the audit conducted under paragraph (1), including the assessments required under subparagraph (B), and the determination made under subparagraph (C) of paragraph (1).

(b)

Definition of Applicable Period

In this section, the term applicable period means—

(1)

for the first report submitted under this section, the period beginning on October 1, 2005, and ending on September 30 of the last full fiscal year before the date of enactment of this Act for which information is available; and

(2)

for the second and each subsequent report submitted under this section, the period—

(A)

beginning on October 1 of the first fiscal year after the end of the most recent full fiscal year relating to which a report under this section was submitted; and

(B)

ending on September 30 of the last full fiscal year before the date of the report.

307.

Continued evaluation by the National Academy of Sciences

Section 108 of the Small Business Reauthorization Act of 2000 (15 U.S.C. 638 note) is amended by adding at the end the following:

(e)

Extensions and enhancements of authority

(1)

In general

Not later than 6 months after the date of enactment of the Creating Jobs Through Small Business Innovation Act of 2011, the head of each agency described in subsection (a), in consultation with the Small Business Administration, shall cooperatively enter into an agreement with the National Academy of Sciences for the National Research Council to, not later than 4 years after the date of enactment of the Creating Jobs Through Small Business Innovation Act of 2011, and every 4 years thereafter—

(A)

continue the most recent study under this section relating to the issues described in subparagraphs (A), (B), (C), and (E) of subsection (a)(1);

(B)

conduct a comprehensive study of how the STTR program has stimulated technological innovation and technology transfer, including—

(i)

a review of the collaborations created between small businesses and research institutions, including an evaluation of the effectiveness of the program in stimulating new collaborations and any obstacles that may prevent or inhibit the creation of such collaborations;

(ii)

an evaluation of the effectiveness of the program at transferring technology and capabilities developed through Federal funding;

(iii)

an evaluation of the program’s success at commercializing technologies compared with other Federal technology transfer programs and the SBIR program;

(iv)

to the extent practicable, an evaluation of the economic benefits achieved by the STTR program, including the economic rate of return;

(v)

an analysis of how Federal agencies are using small businesses that have completed Phase II under the STTR program to fulfill their procurement needs; and

(vi)

an analysis of whether the existing STTR allocation has impacted the effectiveness of the program in achieving its goals;

(C)

make recommendations with respect to the issues described in subparagraph (A), (D), and (E) of subsection (a)(2) and subparagraph (B) of this paragraph; and

(D)

estimate, to the extent practicable, the number of jobs created by the SBIR program or STTR program of the agency.

(2)

Consultation

An agreement under paragraph (1) shall require the National Research Council to ensure that there is participation by and consultation with the small business community, the Administration, and other interested parties as described in subsection (b).

(3)

Reporting

An agreement under paragraph (1) shall require that—

(A)

not later than 4 years after the date of enactment of the Creating Jobs Through Small Business Innovation Act of 2011, and every 4 years thereafter, the National Research Council shall submit to the head of the agency entering into the agreement, the Committee on Small Business and Entrepreneurship of the Senate, and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives, a report regarding the study conducted under paragraph (1) and containing the recommendations described in paragraph (1); and

(B)

not later than 2 years after the date of enactment of the Creating Jobs Through Small Business Innovation Act of 2011, the National Research Council shall submit to the head of the agency entering into the agreement, the Committee on Small Business and Entrepreneurship of the Senate, and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives, a report of preliminary findings and recommendations regarding the study conducted under paragraph (1)(B).

.

308.

Technology insertion reporting requirements

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(ll)

Phase III Reporting

The annual SBIR or STTR report to Congress by the Administration under subsection (b)(7) shall include, for each Phase III award made by the Federal agency—

(1)

the name of the agency or component of the agency or the non-Federal source of capital making the Phase III award;

(2)

the name of the small business concern or individual receiving the Phase III award; and

(3)

the dollar amount of the Phase III award.

.

309.

Obtaining consent from SBIR and STTR applicants to release contact information to economic development organizations

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(mm)

Consent To Release Contact Information to Organizations

(1)

Enabling concern to give consent

Each Federal agency required by this section to conduct an SBIR program or an STTR program shall enable a small business concern that is an SBIR applicant or an STTR applicant to indicate to the Federal agency whether the Federal agency has the consent of the concern to—

(A)

identify the concern to appropriate local and State-level economic development organizations as an SBIR applicant or an STTR applicant; and

(B)

release the contact information of the concern to such organizations.

(2)

Rules

The Administrator shall establish rules to implement this subsection. The rules shall include a requirement that a Federal agency include in the SBIR and STTR application a provision through which the applicant can indicate consent for purposes of paragraph (1).

.

310.

Pilot to allow funding for administrative, oversight, and contract processing costs

(a)

In General

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(nn)

Assistance for Administrative, Oversight, and Contract Processing Costs

(1)

In general

Subject to paragraph (2), for the 3 full fiscal years beginning after the date of enactment of this subsection, the Administrator shall allow each Federal agency required to conduct an SBIR program to use not more than 3 percent of the funds allocated to the SBIR program of the Federal agency for—

(A)

the administration of the SBIR program or the STTR program of the Federal agency;

(B)

the provision of outreach and technical assistance relating to the SBIR program or STTR program of the Federal agency, including technical assistance site visits and personnel interviews;

(C)

the implementation of commercialization and outreach initiatives that were not in effect on the date of enactment of this subsection;

(D)

carrying out the program under subsection (y);

(E)

activities relating to oversight and congressional reporting, including waste, fraud, and abuse prevention activities;

(F)

targeted reviews of recipients of awards under the SBIR program or STTR program of the Federal agency that the head of the Federal agency determines are at high risk for fraud, waste, or abuse, to ensure compliance with requirements of the SBIR program or STTR program, respectively;

(G)

the implementation of oversight and quality control measures, including verification of reports and invoices and cost reviews;

(H)

carrying out subsection (dd);

(I)

carrying out subsection (hh);

(J)

contract processing costs relating to the SBIR program or STTR program of the Federal agency; and

(K)

funding for additional personnel and assistance with application reviews.

(2)

Performance criteria

A Federal agency may not use funds as authorized under paragraph (1) until after the effective date of performance criteria, which the Administrator shall establish, to measure any benefits of using funds as authorized under paragraph (1) and to assess continuation of the authority under paragraph (1).

(3)

Rules

Not later than 180 days after the date of enactment of this subsection, the Administrator shall issue rules to carry out this subsection.

(4)

Coordination with IG

Each Federal agency shall coordinate the activities funded under subparagraph (E), (F), or (G) of paragraph (1) with their respective Inspectors General, when appropriate, and each Federal agency that allocates more than $50,000,000 to the SBIR program of the Federal agency for a fiscal year may share such funding with its Inspector General when the Inspector General performs such activities.

.

(b)

Technical and Conforming Amendments

(1)

In general

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended—

(A)

in subsection (f)(2), by striking shall not and all that follows through make available for the purpose and inserting shall not make available for the purpose; and

(B)

in subsection (y)—

(i)

by striking paragraph (4);

(ii)

by redesignating paragraphs (5), (6), and (7) as paragraphs (4), (5), and (6), respectively; and

(iii)

in paragraph (6), as so redesignated, by striking described in paragraph (6)(C) and inserting described in paragraph (5)(C).

(2)

Transitional rule

Notwithstanding the amendments made by paragraph (1), subsection (f)(2) and (y)(4) of section 9 of the Small Business Act (15 U.S.C. 638), as in effect on the day before the date of enactment of this Act, shall continue to apply to each Federal agency until the effective date of the performance criteria established by the Administrator under subsection (nn)(2) of section 9 of the Small Business Act, as added by subsection (a).

(3)

Prospective repeal

Effective on the first day of the fourth full fiscal year following the date of enactment of this Act, section 9 of the Small Business Act (15 U.S.C. 638), as amended by paragraph (1) of this section, is amended—

(A)

in subsection (f)(2), by striking “shall not make available for the purpose” and inserting the following: “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

; and

(B)

in subsection (y)—

(i)

by redesignating paragraphs (4), (5), and (6) as paragraphs (5), (6), and (7), respectively;

(ii)

in paragraph (7), as so redesignated, by striking described in paragraph (5)(C) and inserting described in paragraph (6)(C); and

(iii)

by inserting after paragraph (3) the following:

(4)

Funding

(A)

In general

The Secretary of Defense and each Secretary of a military department may use not more than an amount equal to 1 percent of the funds available to the Department of Defense or the military department pursuant to the Small Business Innovation Research Program for payment of expenses incurred to administer the Commercialization Pilot Program under this subsection.

(B)

Limitations

The funds described in subparagraph (A)—

(i)

shall not be subject to the limitations on the use of funds in subsection (f)(2); and

(ii)

shall not be used to make Phase III awards.

.

311.

GAO study with respect to venture capital operating company, hedge fund, and private equity firm involvement

Not later than 2 years after the date of enactment of this Act, and every 2 years thereafter, the Comptroller General of the United States shall—

(1)

conduct a study of the impact of requirements relating to venture capital operating company, hedge fund, and private equity firm involvement under section 9 of the Small Business Act; and

(2)

submit to Congress a report regarding the study conducted under paragraph (1).

312.

Reducing vulnerability of SBIR and STTR programs to fraud, waste, and abuse

(a)

Fraud, Waste, and Abuse Prevention

(1)

Amendments required for fraud, waste, and abuse prevention

Not later than 90 days after the date of enactment of this Act, the Administrator shall amend the SBIR Policy Directive and the STTR Policy Directive to include measures to prevent fraud, waste, and abuse in the SBIR program and the STTR program.

(2)

Content of amendments

The amendments required under paragraph (1) shall include—

(A)

definitions or descriptions of fraud, waste, and abuse;

(B)

guidelines for the monitoring and oversight of applicants to and recipients of awards under the SBIR program or the STTR program;

(C)

a requirement that each Federal agency that participates in the SBIR program or STTR program include information concerning the method established by the Inspector General of the Federal agency to report fraud, waste, and abuse (including any telephone hotline or Web-based platform)—

(i)

on the website of the Federal agency; and

(ii)

in any solicitation or notice of funding opportunity issued by the Federal agency for the SBIR program or the STTR program; and

(D)

a requirement that each applicant for and small business concern that receives funding under the SBIR program or the STTR program shall certify whether the applicant or small business concern is in compliance with the laws relating to the SBIR program and the STTR program and the conduct guidelines established under the SBIR Policy Directive and the STTR Policy Directive.

(3)

Consultation

The Administrator shall develop the certification required under paragraph (2)(D) in cooperation with the Council of Inspectors General on Integrity and Efficiency and the Office of Advocacy of the Administration.

(4)

Certification

The certification developed under paragraph (3) may—

(A)

cover the lifecycle of the award to require certifications at the application, funding, reporting, and closeout phases of every SBIR and STTR award;

(B)

require the small business concern to certify compliance with the principal investigator primary employment requirement, the small business concern definition requirement, and the performance of work requirements as set forth in the Directive applicable to the award;

(C)

require the small business concern to disclose whether it has applied for, plans to apply for, or received an SBIR or STTR award for the same or overlapping work, and require the concern to certify that the award that it is applying for or obtaining funding for is not the same or overlapping with work it has performed, or will perform, in connection with any other SBIR or STTR award that the concern has applied for or received from any other agency except as fully disclosed to all funding agencies; and

(D)

require that the small business concern certify that it will or did perform the work on the award at its facilities with its employees, unless otherwise indicated.

(5)

Inspectors General

The Inspector General of each Federal agency that participates in the SBIR program or STTR program shall cooperate to prevent fraud, waste, and abuse in the SBIR program and the STTR program by—

(A)

establishing fraud detection indicators;

(B)

reviewing regulations and operating procedures of the Federal agency;

(C)

coordinating information sharing between Federal agencies, to the extent otherwise permitted under Federal law; and

(D)

improving the education and training of, and outreach to—

(i)

administrators of the SBIR program and the STTR program of the Federal agency;

(ii)

applicants to the SBIR program or the STTR program; and

(iii)

recipients of awards under the SBIR program or the STTR program.

(b)

Study and Report

Not later than 1 year after the date of enactment of this Act to establish a baseline of changes made to the program to fight fraud, waste, and abuse, and every 3 years thereafter to evaluate the effectiveness of the agency strategies, the Comptroller General of the United States shall—

(1)

conduct a study that evaluates—

(A)

the implementation by each Federal agency that participates in the SBIR program or the STTR program of the amendments to the SBIR Policy Directive and the STTR Policy Directive made pursuant to subsection (a);

(B)

the effectiveness of the management information system of each Federal agency that participates in the SBIR program or STTR program in identifying duplicative SBIR and STTR projects;

(C)

the effectiveness of the risk management strategies of each Federal agency that participates in the SBIR program or STTR program in identifying areas of the SBIR program or the STTR program that are at high risk for fraud;

(D)

technological tools that may be used to detect patterns of behavior that may indicate fraud by applicants to the SBIR program or the STTR program;

(E)

the success of each Federal agency that participates in the SBIR program or STTR program in reducing fraud, waste, and abuse in the SBIR program or the STTR program of the Federal agency; and

(F)

the extent to which the Inspector General of each Federal agency that participates in the SBIR and STTR program effectively conducts investigations, audits, inspections, and outreach relating to the SBIR and STTR programs of the Federal agency; and

(2)

submit to the Committee on Small Business and Entrepreneurship of the Senate, the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives, and the head of each Federal agency that participates in the SBIR program or STTR program a report on the results of the study conducted under subparagraph (A).

313.

Simplified paperwork requirements

Section 9(v) of the Small Business Act (15 U.S.C. 638(v)) is amended—

(1)

in the subsection heading, by striking Simplified Reporting Requirements and inserting Reducing Paperwork and Compliance Burden;

(2)

by striking The Administrator and inserting the following:

(1)

Standardization of reporting requirements

The Administrator

; and

(3)

by adding at the end the following:

(2)

Simplification of application and award process

Not later than one year after the date of enactment of this paragraph, and after a period of public comment, the Administrator shall issue regulations or guidelines, taking into consideration the unique needs of each Federal agency, to ensure that each Federal agency required to carry out an SBIR program or STTR program simplifies and standardizes the program proposal, selection, contracting, compliance, and audit procedures for the SBIR program or STTR program of the Federal agency (including procedures relating to overhead rates for applicants and documentation requirements) to reduce the paperwork and regulatory compliance burden on small business concerns applying to and participating in the SBIR program or STTR program.

.

314.

Reducing fraud, waste, and abuse

Not later than 4 years after the date of enactment of this Act, and every 4 years thereafter, the Comptroller General of the United States shall—

(1)

conduct a study of the effectiveness of the government and public databases described in section 9(k) of the Small Business Act (15 U.S.C. 638(k)) in reducing vulnerabilities of the SBIR program and the STTR program to fraud, waste, and abuse, particularly with respect to Federal agencies funding duplicative proposals and business concerns falsifying information in proposals;

(2)

make recommendations with respect to the issues described in paragraph (1); and

(3)

submit to the head of each agency described in section 108(a) of the Small Business Reauthorization Act of 2000 (15 U.S.C. 638 note), the Committee on Small Business and Entrepreneurship of the Senate, and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives a report regarding the study conducted under paragraph (1) and containing the recommendations described in paragraph (2).

IV

POLICY DIRECTIVES

401.

Conforming amendments to the SBIR and the STTR Policy Directives

(a)

In General

Not later than 180 days after the date of enactment of this Act, the Administrator shall promulgate amendments to the SBIR Policy Directive and the STTR Policy Directive to conform such directives to this Act and the amendments made by this Act.

(b)

Publishing SBIR Policy Directive and the STTR Policy Directive in the Federal Register

Not later than 180 days after the date of enactment of this Act, the Administrator shall publish the amended SBIR Policy Directive and the amended STTR Policy Directive in the Federal Register.

V

OTHER PROVISIONS

501.

Report on SBIR and STTR program goals

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(oo)

Annual Report on SBIR and STTR Program Goals

(1)

Development of metrics

The head of each Federal agency required to participate in the SBIR program or the STTR program shall develop metrics to evaluate the effectiveness, and the benefit to the people of the United States, of the SBIR program and the STTR program of the Federal agency that—

(A)

are science-based and statistically driven;

(B)

reflect the mission of the Federal agency; and

(C)

include factors relating to the economic impact of the programs.

(2)

Evaluation

The head of each Federal agency described in paragraph (1) shall conduct an annual evaluation using the metrics developed under paragraph (1) of—

(A)

the SBIR program and the STTR program of the Federal agency; and

(B)

the benefits to the people of the United States of the SBIR program and the STTR program of the Federal agency.

(3)

Report

(A)

In general

The head of each Federal agency described in paragraph (1) shall submit to the appropriate committees of Congress and the Administrator an annual report describing in detail the results of an evaluation conducted under paragraph (2).

(B)

Public availability of report

The head of each Federal agency described in paragraph (1) shall make each report submitted under subparagraph (A) available to the public online.

(C)

Definition

In this paragraph, the term appropriate committees of Congress means—

(i)

the Committee on Small Business and Entrepreneurship of the Senate; and

(ii)

the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives.

.

502.

Competitive selection procedures for SBIR and STTR programs

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(pp)

Competitive Selection Procedures for SBIR and STTR Programs

All funds awarded, appropriated, or otherwise made available in accordance with subsection (f) or (n) must be awarded pursuant to competitive and merit-based selection procedures.

.

503.

Loan restrictions

(a)

Rule required

For purposes of section 9 of the Small Business Act (15 U.S.C. 638), the Administrator shall promulgate a rule not later than 180 days after the date of enactment of this Act that determines what restrictions, conditions, or covenants contained in a note, bond, debenture, other evidence of indebtedness, or preferred stock constitute affiliation for purposes of section 121.103(a) of title 13, Code of Federal Regulations, as in effect on January 1, 2011.

(b)

Failure to promulgate

If the Administrator fails to promulgate a rule in the time period required under subsection (a), the holder of a note, bond, debenture, other evidence of indebtedness, or preferred stock shall be considered to be affiliated with the debtor or issuer of the preferred stock until such time as the Administrator promulgates the rule required under subsection (a).

504.

Limitation on pilot programs

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(qq)

Limitation on pilot programs

(1)

In general

The Administrator may only carry out a covered pilot program if in accordance with paragraphs (2) and (3).

(2)

Existing pilot programs

With respect to a covered pilot program in operation on the date of enactment of this subsection, such program may only be carried out during the 3-year period beginning on such date of enactment.

(3)

New pilot programs

With respect to a covered pilot program established after the date of enactment of this subsection, such program—

(A)

may only be carried out during the 3-year period beginning on the date on which such program is established; and

(B)

may not continue or be based on, in any manner, a previously established covered pilot program.

(4)

Covered pilot program defined

In this subsection, the term covered pilot program means any initiative, project, innovation, or other activity—

(A)

relating to an SBIR or STTR program; and

(B)

not specifically authorized by law.

.

505.

Ensuring equity in SBIR and STTR awards to individual companies

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(rr)

Ensuring equity in SBIR and STTR awards to individual companies

A small business concern, including affiliates of the small business concern, may not receive an SBIR or STTR award in a fiscal year if, at the time the award is made—

(1)

the small business concern has received an aggregate dollar amount of such awards in such fiscal year that exceeds 50 percent of the aggregate dollar amount of such awards received, in the preceding fiscal year, by the median State with respect to such aggregate amount; or

(2)

the small business concern has received an aggregate number of such awards in such fiscal year that exceeds 50 percent of the aggregate number of such awards received, in the preceding fiscal year, by the median State with respect to such aggregate number.

.

506.

Inspector General reports

Not later than October 1 of each year, the Inspector General of each Federal agency that participates in the SBIR program or STTR program shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives a report describing—

(1)

the number of cases referred to the Inspector General in the preceding year that related to fraud, waste, or abuse with respect to the SBIR program or STTR program;

(2)

the actions taken in each case described in paragraph (1) if fraud, waste, or abuse was determined to have occurred;

(3)

if no action was taken in a case described in paragraph (1) and fraud, waste, or abuse was determined to have occurred, the justification for action not being taken; and

(4)

an accounting of the funds used to address fraud, waste, and abuse, including a description of personnel and resources funded and funds that were recovered or saved.

507.

Timing

Federal agencies participating in the SBIR program or STTR program shall, to the extent possible, attempt to shorten the amount of time between the provision of notice of an award under the SBIR program or STTR program and the subsequent release of funding with respect to the award.

508.

Publication of certain information

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(ss)

Publication of certain information

In order to increase the number of small businesses receiving awards under the SBIR or STTR programs of participating agencies, and to simplify the application process for such awards, the Administrator shall establish and maintain a public Internet website on which the Administrator shall publish such information relating to notice of and application for awards under the SBIR program and STTR program of each participating Federal agency as the Administrator determines appropriate.

.

509.

Preference for clean coal technology research

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(tt)

Clean coal technology research preference

In making awards under this section, a Federal agency shall give priority to applications in a manner that increases the number of SBIR and STTR award recipients conducting research with respect to clean coal technology, including the gasification of coal.

.

510.

Report on enhancement of manufacturing activities

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(uu)

Report on enhancement of manufacturing activities

Not later than October 1, 2011, and annually thereafter, the head of each Federal agency that makes more than $50,000,000 in awards under the SBIR and STTR programs of the agency combined shall submit to the Committee on Small Business and Entrepreneurship of the Senate and the Committee on Small Business and the Committee on Science, Space, and Technology of the House of Representatives a report that includes—

(1)

a description of efforts undertaken by the head of the Federal agency to enhance manufacturing activities;

(2)

a comprehensive description of the actions undertaken each year by the head of the Federal agency in carrying out the SBIR or STTR program of the agency in support of Executive Order 13329 (69 Fed. Reg. 9181; relating to encouraging innovation in manufacturing);

(3)

an assessment of the effectiveness of the actions described in paragraph (2) at enhancing the research and development of manufacturing technologies and processes; and

(4)

recommendations that the program managers of the SBIR or STTR program of the agency consider appropriate for additional actions to increase the effectiveness of enhancing manufacturing activities.

.

511.

Express authority to fast-track Phase II awards for promising Phase I research

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(vv)

Authority to Fast-Track Phase II awards for promising Phase I research

To address the delay between an award for Phase I of an SBIR program and the application for and extension of an award for Phase II of such program, each Federal agency with an SBIR program may develop fast-track programs to eliminate such delay by issuing Phase II SBIR awards as soon as practicable, including in appropriate cases simultaneously with the issuance of the Phase I SBIR award. The Administrator shall encourage the development of such fast-track programs.

.

512.

Increased partnerships between SBIR awardees and prime contractors, venture capital investment companies, and larger businesses

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(ww)

Increased partnerships

(1)

In general

Each agency required by this section to conduct an SBIR program shall establish initiatives by which the agency encourages partnerships between SBIR awardees and prime contractors, venture capital investment companies, business incubators, and larger businesses, for the purpose of facilitating the progress of the SBIR awardees to Phase III.

(2)

Definition

In this subsection, the term business incubator means an entity that provides coordinated and specialized services to entrepreneurial businesses which meet selected criteria during the businesses' startup phases, including providing services such as shared office space and office services, access to equipment, access to telecommunications and technology services, flexible leases, specialized management assistance, access to financing, mentoring and training services, or other coordinated business or technical support services designed to provide business development assistance to entrepreneurial businesses during these businesses’ startup phases.

.

513.

Preference for acid mine drainage research

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(xx)

Acid mine drainage research preference

In making awards under this section, a Federal agency shall give priority to applications in a manner that increases the number of SBIR and STTR award recipients conducting research related to reducing the environmental impact, including with respect to water quality, of acid mine drainage.

.

514.

Preference for hydraulic fracturing research

Section 9 of the Small Business Act (15 U.S.C. 638), as amended by this Act, is further amended by adding at the end the following:

(yy)

Hydraulic fracturing research preference

In making awards under this section, a Federal agency shall give priority to applications in a manner that increases the number of SBIR and STTR award recipients conducting research related to reducing the environmental impact, including with respect to water quality, of the use of hydraulic fracturing during natural gas exploration activities.

.

July 1, 2011

Reported from the Committee on Small Business with an amendment

July 1, 2011

Committee on Armed Services discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printed