[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]




 
                            SUBCOMMITTEE ON
                      CONTRACTING AND TECHNOLOGY
                  MARKUP ON LEGISLATIONS TO MODERNIZE
                       THE SBIR AND STTR PROGRAMS

=======================================================================

                                HEARING

                               before the


                      COMMITTEE ON SMALL BUSINESS
                             UNITED STATES
                        HOUSE OF REPRESENTATIVES

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                              HEARING HELD
                             June 11, 2009

                               __________

                               [GRAPHIC] [TIFF OMITTED] TONGRESS.#13
                               

            Small Business Committee Document Number 111-029
Available via the GPO Website: http://www.access.gpo.gov/congress/house


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                   HOUSE COMMITTEE ON SMALL BUSINESS

                NYDIA M. VELAZQUEZ, New York, Chairwoman

                          DENNIS MOORE, Kansas

                      HEATH SHULER, North Carolina

                     KATHY DAHLKEMPER, Pennsylvania

                         KURT SCHRADER, Oregon

                        ANN KIRKPATRICK, Arizona

                          GLENN NYE, Virginia

                         MICHAEL MICHAUD, Maine

                         MELISSA BEAN, Illinois

                         DAN LIPINSKI, Illinois

                      JASON ALTMIRE, Pennsylvania

                        YVETTE CLARKE, New York

                        BRAD ELLSWORTH, Indiana

                        JOE SESTAK, Pennsylvania

                         BOBBY BRIGHT, Alabama

                        PARKER GRIFFITH, Alabama

                      DEBORAH HALVORSON, Illinois

                  SAM GRAVES, Missouri, Ranking Member

                      ROSCOE G. BARTLETT, Maryland

                         W. TODD AKIN, Missouri

                            STEVE KING, Iowa

                     LYNN A. WESTMORELAND, Georgia

                          LOUIE GOHMERT, Texas

                         MARY FALLIN, Oklahoma

                         VERN BUCHANAN, Florida

                      BLAINE LUETKEMEYER, Missouri

                         AARON SCHOCK, Illinois

                      GLENN THOMPSON, Pennsylvania

                         MIKE COFFMAN, Colorado

                  Michael Day, Majority Staff Director

                 Adam Minehardt, Deputy Staff Director

                      Tim Slattery, Chief Counsel

                  Karen Haas, Minority Staff Director

        .........................................................

                                  (ii)

  
?

                         STANDING SUBCOMMITTEE

                                 ______

               Subcommittee on Contracting and Technology

                     GLENN NYE, Virginia, Chairman


YVETTE CLARKE, New York              AARON SCHOCK, Illinois, Ranking
BRAD ELLSWORTH, Indiana              ROSCOE BARTLETT, Maryland
KURT SCHRADER, Oregon                TODD AKIN, Missouri
DEBORAH HALVORSON, Illinois          MARY FALLIN, Oklahoma
MELISSA BEAN, Illinois               GLENN THOMPSON, Pennsylvania
JOE SESTAK, Pennsylvania
PARKER GRIFFITH, Alabama

                                 (iii)

  
?



                            C O N T E N T S

                               __________

                           OPENING STATEMENTS

                                                                   Page

Nye, Hon. Glenn..................................................     1
Schock, Hon. Aaron...............................................     2

                                APPENDIX


Prepared Statements:
Nye, Hon. Glenn..................................................     8

Documents for the Record:
H.R. 2769, The Commercializing Small Business Research and 
  Development Act................................................     9
H.R. 2767, The Investing in Tomorrow's Technology Act............    18
H.R. 2747, The Rural Technology Development and Outreach Act.....    23
H.R. 2772, The SBIR and STTR Enhancement Act.....................    34

                                  (v)

  


                            SUBCOMMITTEE ON
                       CONTRACTING AND TECHNOLOGY
                   MARKUP OF LEGISLATION MODERNIZING
                      THE SBIR AND STTR PROGRAMS;
              [H.R. 2769; H.R. 2767; H.R. 2747; H.R. 2772]

                        Thursday, June 11, 2009

                     U.S. House of Representatives,
                               Committee on Small Business,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2360 Rayburn House Office Building, Hon. Glenn Nye 
[chairman of the Subcommittee] presiding.
    Present: Representatives Nye, Clarke, Schrader, Halvorson, 
Schock and Thompson.
    Chairman Nye. Good morning. I would like to go ahead and 
call this morning's mark-up to order.
    Today the Committee will consider legislation to 
reauthorize the Small Business Innovation Research and Small 
Business Technology Transfer Programs. Though immensely 
valuable, these initiatives are in sore need of modernization. 
In fact, they have not been updated for over eight years.
    Needless to say, a lot has changed since then. The small 
business community has shifted dramatically, and it is critical 
that these programs reflect those changes. Entrepreneurs are 
proven innovators. Time and time again they have sparked 
critical industry breakthroughs. Today with the help of SBIR 
and STTR grants, they are leading the way to address everything 
from health care reform to national security threats.
    SBIR and STTR are vital programs, but their continued 
success is not guaranteed. As of today, the health of these 
initiatives hinges on three primary factors.
    First, they must remain highly competitive.
    Second, awardees must have adequate access to investment.
    And, finally, promising products should be commercialized 
and brought to market.
    The four bills before us today are a comprehensive answer 
to those issues. I want to commend the sponsors of the 
legislation for their hard work: Ranking Member Schock, 
Representative Bright, Representative Halvorson, and Ranking 
Member Graves. They recognized that modernizing SBIR and STTR 
is a small business necessity, one that will help our 
entrepreneurs not only develop new products, but also grow and 
create jobs.
    And I would now like to yield to our Ranking Member Schock 
for any opening remarks.
    Mr. Schock. Thank you, Mr. Chairman.
    Good morning. Thank you all for being here as we mark up 
the legislation to reauthorize and modernize this Small 
Business Innovation and Small Business Technology Transfer 
Programs.
    These two programs represent the kind of public-private 
partnership that truly has a positive impact on our nation's 
small businesses. In today's worsening economy, we are 
continually looking to our small, innovative companies to 
create new jobs and improve our economy. Small businesses can 
and will be the driving force to lead our economy out of this 
recession, and the SBIR and STTR Programs can be vital to their 
success.
    For over 20 years, the SBIR and STTR Programs have provided 
critical funding for small companies with innovative ideas 
seeking to bring their products to market. In an ever changing 
world economy, we must insure that these programs keep up with 
the global demands that small businesses face on a daily basis 
from large competitors at home and abroad.
    The legislation we have before us today goes a long way 
toward helping American small businesses compete globally and 
locally. I am pleased to have introduced one of these bills, 
House Resolution 2772, the SBIR and STTR Enhancement Act. This 
bill makes a wide variety of changes to the SBIR and STTR 
Programs designed to bring them into the 21st Century.
    For example, the legislation raises the award levels to 
reflect the modern costs of doing business in high technology 
fields, award levels which have not been raised since the 
inception of the program.
    The bill also provides the way small businesses and 
sponsoring agencies share information, by creating online 
databases to improve information flow between agencies and 
participants.
    My legislation will also create an interagency policy 
committee among the participating agencies to report specific 
findings to the relevant congressional committees. The creation 
of these committees and databases will allow for greater 
oversight and better management of the SBIR Program.
    Mr. Chairman, it is essential we make these changes to 
these programs so that our innovative small companies have an 
outlet for their ideas. I am very appreciative of you and your 
work, Chairman Velazquez for the bipartisan manner in which 
this Committee business has been conducted. I look forward to 
working with you on these pieces of legislation and urge my 
colleagues to support their passage.
    Thank you, Mr. Chairman. I yield back.
    Chairman Nye. Thank you, Mr. Schock.
    Are there any other members who would like to be recognized 
at this point for opening remarks?
    [No response.]
    Chairman Nye. Okay. Seeing none, we will continue to 
consider the first bill, H.R. 2769, the Commercializing Small 
Business Research and Development Act, introduced by 
Representative Bright.
    [The Bill H.R. 2769 is included in the appendix.]

    Chairman Nye. Commercialization takes time and money, and 
as of now the majority of SBIR and STTR products never make it 
market. There are a number of reasons for this ranging from 
shortfalls in business development training to lack of 
communication between SBIR reps. and purchasing agencies. This 
bill will address those issues.
    To begin, it starts a dialogue between agencies and SBIR 
officers. In doing so it gives small firms a leg up in winning 
contracts and promises to ease the R&D learning curve. By 
establishing training initiatives and mentoring programs, H.R. 
2769 gives small firms the tools they need to innovate. Coupled 
with annual benchmarks for commercialization, these services 
will help more new technologies get to market. Once these 
products start selling, entrepreneurs can begin growing their 
businesses and creating new jobs.
    I would now like to yield to Ranking Member Schock if he 
has any comments.
    Okay. Are there any other members who wish to be recognized 
on this bill?
    [No response.]
    Chairman Nye. Okay. Seeing none, the Committee now moves to 
consideration of H.R. 2769. The Clerk will report the title of 
the bill.
    The Clerk. To amend the Small Business Act to promote the 
commercialization of certain small business research and 
development projects and for other purposes.
    Chairman Nye. I ask unanimous consent that the bill in its 
entirety be open for amendments at this time. Does any member 
seek recognition for the purpose of offering an amendment?
    [No response.]
    Chairman Nye. Seeing no amendments, the question is on 
reporting H.R. 2769 to the full Committee. All those in favor 
say aye.
    [Chorus of ayes.]
    Chairman Nye. All those opposed say no.
    [No response.]
    Chairman Nye. The ayes have it. The bill is adopted and 
reported to the full Committee.
    SBIR and STTR are critical in promoting small business 
research, but once an idea has been fleshed out, it often 
requires additional funding. In these cases, outside investment 
goes a long way.
    H.R. 2767, introduced by Ranking Member Graves, will allow 
entrepreneurs to access that kind of capital. The Investing in 
Tomorrow's Technology Act gives business owners the funds to 
see R&D from start to finish. Those resources are essential for 
industries like energy and biotechnology. In these areas, the 
most promising products are often the costliest to make. The 
process of medical R&D, for example, can take several years and 
millions of dollars.
    In determining how those projects are financed, 
entrepreneurs should have the final say, not Washington 
bureaucrats. Ranking Member Graves has consistently worked to 
help small firms access equity capital. I want to thank him for 
his leadership on this important issue, and I urge support for 
H.R. 2767.
    I would now like to yield to our Ranking Member or any 
other member of the Committee if they would like to add any 
remarks on this legislation.
    [No response.]
    Chairman Nye. The Committee now moves to the consideration 
of H.R. 2767.
    [The Bill H.R. 2767 is included in the appendix.]

    Chairman Nye. The Clerk will report the title of the bill.
    The Clerk. To amend the Small Business Act to extend and 
improve the Small Business Innovation Research Program and the 
Small Business Technology Transfer Program and for other 
purposes.
    Chairman Nye. I ask unanimous consent that the bill in its 
entirety be open for amendments at this time. Does any member 
seek recognition for the purpose of offering an amendment?
    [No response.]
    Chairman Nye. Seeing none, the question is on reporting 
H.R. 2767 to the full Committee. All those in favor say aye.
    [Chorus of ayes.]
    Chairman Nye. All those opposed say no.
    [No response.]
    Chairman Nye. The ayes have it. The bill is adopted and 
reported to the full Committee.
    Innovation is a powerful force for growth, particularly in 
under served and rural regions. In these areas the development 
of new products is the surest path to job creation. With that 
in mind, Representative Halvorson has introduced H.R. 2747, the 
Rural Technology Development and Outreach Act.
    This bill works to recruit and cultivate the next 
generation of innovators. It does so by reaching out to 
traditionally under served communities. It educates 
entrepreneurs about SBIR and STTR and encourages them to get 
involved in the programs. By providing technical assistance to 
these men and women, H.R. 2747 gives them the know-how to 
navigate the system.
    In encouraging innovation, it is critical that we reach out 
to previously untapped communities and historically under 
represented groups, such as women and veterans. This bill will 
do that, and it will expand the small business tent. After all, 
a greater number of SBIR applicants means a deeper talent pool.
    And of course, the more talented entrepreneurs we can 
attract, the more viable ideas we can bring to market. H.R. 
2747 is an important legislative initiative, and I urge members 
to support its passage.
    I would like now to yield to the Ranking Member if he has 
any comment.
    I would now yield to the bill's sponsor, Representative 
Halvorson for any remarks.
    Ms. Halvorson. Good morning, and I would like to thank Mr. 
Nye for holding this mark-up.
    The legislation we are examining is an important investment 
in small business. I know it will go a long way to help 
entrepreneurs in my home district, as well as rural regions 
across the country. As we work our way towards recovery, we are 
trying to do more than simply turn the tide. We are working 
toward growth that is sustainable, job creation that is 
lasting, and a recovery that revives the whole country, not 
just pockets here and there.
    Already we have made real progress. This Congress has taken 
important steps to help small businesses, but if we are really 
going to turn things around, we will need new foundation, one 
that supports Americans everywhere, from inner cities to rural 
regions.
    Our country's rural areas are suffering. In terms of 
innovation they have really fallen behind the curve. While 
States like Massachusetts and California enjoy significant 
shares of research and development, places like my home State 
of Illinois struggle just to keep up.
    The Real Technology Development and Outreach Act of 2009 
will change that. This act recognizes that innovation is an 
economic necessity that innovates in the heartland. By 
expanding the SBIR and STTR Programs, it will make sure real 
entrepreneurs have the training and the technical assistance 
they need to adapt and grow.
    Every year SBIR and STTR help 1,500 firms get off the 
ground. Still, many entrepreneurs do not know that these 
programs even exist. Through workshops and local marketing 
campaigns, we are going to increase awareness. By bringing more 
entrepreneurs into the program, we can broaden our talent pool 
and ultimately boost the number of products that make it into 
the market. This is critical because greater commercialization 
means greater job growth.
    When it comes to R&D, knowledge is power. Through increased 
outreach, we can be sure that entrepreneurs know their options, 
but before they can win SBIR and STTR grants, they will need to 
understand the ins and the outs of the program.
    The SBIR and STTR application process is complex. This bill 
will help break it down for entrepreneurs, and business owners 
need to know how to do things like select a purchasing agent/
agency and meet program requirements. So with tools like 
training workshops and podcast seminars, we can give them that 
information.
    And our efforts do not just focus on traditional 
entrepreneurs either. Rather, they actively recruit women, 
veterans, and minorities because the face of American business 
is changing, and it is time for SBIR to reflect that shift 
particularly in struggling regions.
    When we talk about the challenges facing under served 
areas, we need to remember one thing. A shortage of resources 
does not mean a lack of ideas. Our rural areas have tremendous 
room for innovation. As we speak family farmers and biofuel 
entrepreneurs are unlocking new energy markets. With SBIR and 
STTR, they can take their technology even further, and we are 
going to give them the resources they need to pioneer a greener 
future, and their success will mean more than energy 
independence. It will create jobs and revitalize entire 
regions.
    As we emerge from the recession, we are going to need that 
kind of growth and redevelopment. By investing in rural 
entrepreneurs, we can rebuild our economy from the foundation 
up, and this bill marks an important first step in the process.
    I yield back.
    Chairman Nye. Thank you, Ms. Halvorson.
    Are there any other members that wish to be recognized on 
H. R. 2747?
    [No response.]
    Chairman Nye. Seeing none, the Committee now moves to 
consideration of H.R. 2747.
    [The Bill H.R. 2747 is included in the appendix.]

    Chairman Nye. The Clerk will report the title of the bill.
    The Clerk. To amend the Small Business Act to improve 
outreach and support activities and to increase wide recipients 
from rural areas with respect to the Small Business Innovation 
Research Program and the Small Business Technology Transfer 
Program and for other purposes.
    Chairman Nye. I ask unanimous consent that the bill in its 
entirety be open for amendments at this time. Does any member 
seek recognition for the purpose of offering an amendment?
    [No response.]
    Chairman Nye. Seeing no amendments, the question is on 
reporting H.R. 2747 to the full Committee. All those in favor 
say aye.
    [Chorus of ayes.]
    Chairman Nye. All those opposed say no.
    [No response.]
    Chairman Nye. The ayes have it. The bill is adopted and 
reported to the full Committee.
    The final piece of legislation that we will consider is 
H.R. 2772, the SBIR and STTR Enhancement Act introduced by 
Ranking Member Schock.
    This act makes important changes to the SBIR and STTR 
Programs. As I mentioned earlier, neither initiative has been 
updated in nearly a decade. H.R. 2772 will modernize them to 
increase efficiency and speed up the process of 
commercialization.
    After more than eight years without an update, SBIR and 
STTR are wrapped in a lot of red tape. This bill will cut 
through those barriers. That is important because current 
regulations and application requirements are tricky to 
navigate. This bill breaks the process down. It creates fewer 
hoops for small firms to jump through and in doing so builds 
greater room for innovation.
    Again, I want to recognize the Ranking Member for his work 
on this bill, and I urge members to support it.
    At this time I would like to yield to Ranking Member 
Schock.
    Mr. Schock. Thank you, Mr. Chairman.
    I will let the comments I made in the opening statement in 
support of this stand, and again, I appreciate your work to 
bring this together and make it a bipartisan bill and allow 
these amendments to stand.
    Thanks.
    Chairman Nye. All right. Thank you, Mr. Schock.
    Are there any other members that wish to be recognized on 
H.R. 2772?
    [No response.]
    Chairman Nye. Seeing none, the Committee now moves to 
consideration of H.R. 2772.
    [The Bill H.R. 2772 is included in the appendix.]

    Chairman Nye. The Clerk will report the title of the bill.
    The Clerk. To amend the Small Business Act to enhance the 
Small Business Innovation and Research Program and the Small 
Business Technology Transfer Program and for other purposes.
    Chairman Nye. I ask unanimous consent that the bill in its 
entirety be open for amendments at this time. Does any member 
seek recognition for the purpose of offering an amendment?
    [No response.]
    Chairman Nye. Seeing no amendments, the question is on 
reporting H.R. 2772 to the full Committee. All those in favor 
say aye.
    [Chorus of ayes.]
    Chairman Nye. All those opposed.
    [No response.]
    Chairman Nye. The ayes have it. The bill is adopted and 
reported to the full Committee.
    This concludes Subcommittee business for today. I ask 
unanimous consent that the Subcommittee is authorized to 
correct section numbers, punctuation, cross-references, and to 
make necessary technical and conforming corrections on the 
bills considered today.
    Without objection, so ordered.
    This mark-up is adjourned.
    [Whereupon, at 10:20 a.m., the Subcommittee was adjourned.]

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