[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
FOSTERING AMERICAN INNOVATION: INSIGHTS
INTO SBIR AND STTR PROGRAMS
=======================================================================
HEARING
before the
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
FEBRUARY 26, 2025
__________
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 119-003
Available via the GPO Website: www.govinfo.gov
------
U.S. GOVERNMENT PUBLISHING OFFICE
58-905 WASHINGTON : 2026
HOUSE COMMITTEE ON SMALL BUSINESS
ROGER WILLIAMS, Texas, Chairman
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
BETH VAN DUYNE, Texas
JAKE ELLZEY, Texas
MARK ALFORD, Missouri
NICK LALOTA, New York
BRAD FINSTAD, Minnesota
TONY WIED, Wisconsin
ROB BRESNAHAN, Pennsylvania
BRIAN JACK, Georgia
TROY DOWNING, Montana
KIMBERLYN KING-HINDS, Northern Marina Islands
DEREK SCHMIDT, Kansas
NYDIA VELAZQUEZ, New York, Ranking Member
MORGAN MCGARVEY, Kentucky
HILLARY SCHOLTEN, Michigan
LAMONICA MCIVER, New Jersey
GIL CISNEROS, California
KELLY MORRISON, Minnesota
GEORGE LATIMER, New York
DEREK TRAN, California
LATEEFAH SIMON, California
JOHNNY OLSZEWSKI, Maryland
HERB CONWAY, New Jersey
MAGGIE GOODLANDER, New Hampshire
Lauren Holmes, Majority Staff Director
Melissa Jung, Minority Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Roger Williams.............................................. 1
Hon. Nydia Velazquez............................................. 3
WITNESSES
Mr. William Marinelli, President and Chief Executive Officer,
Physical Science Inc., Andover, MA............................. 8
Ms. ML Mackey, Chief Executive Officer and Co-founder, Beacon
Interactive Systems, Arlington, VA............................. 10
Mr. Cyrus Miryekta, Chief Executive Officer, Ravelin, US,
Fairfax, VA.................................................... 12
Mr. Jere Glover, Executive Director, Small Business Technology
Council, Annapolis, MD......................................... 13
APPENDIX
Prepared Statements:
Mr. William Marinelli, President and Chief Executive Officer,
Physical Science Inc., Andover, MA......................... 42
Ms. ML Mackey, Chief Executive Officer and Co-founder, Beacon
Interactive Systems, Arlington, VA......................... 51
Mr. Cyrus Miryekta, Chief Executive Officer, Ravelin US,
Fairfax, VA................................................ 56
Mr. Jere Glover, Executive Director, Small Business
Technology Council, Annapolis, MD.......................... 63
Questions and Answers for the Record:
Question from Hon. LaLota to Mr. Miryekta and Response from
Mr. Miryekta............................................... 81
Question from Hon. LaLota to Mr. Marinelli and Response from
Mr. Marinelli.............................................. 83
Additional Material for the Record:
Waiver Request Letter........................................ 84
FOSTERING AMERICAN INNOVATION:
INSIGHTS INTO SBIR AND STTR PROGRAMS
----------
WEDNESDAY, FEBRUARY 26, 2025
House of Representatives,
Committee on Small Business,
Washington, DC.
The Committee met, pursuant to call, at 10:01 a.m., in Room
2360, Rayburn House Office Building, Hon. Roger Williams
[chairman of the Committee] presiding.
Present: Representatives Williams, Stauber, Meuser, Alford,
LaLota, Finstad, Wied, Jack, Downing, King-Hinds, Velazquez,
McGarvey, Scholten, Cisneros, Morrison, Latimer, Tran, Simon,
Olszewski, and Goodlander.
Also Present: Representatives Moolenaar and Krishnamoorthi.
Chairman WILLIAMS. Before we begin, I will ask Mr. Stauber
to open us in prayer.
Mr. STAUBER. Dear Lord, thanks for this wonderful day that
you have given us to provide wisdom to each and every one of us
to live this day in your name. And we also pray for our
families that are back home. We pray for their safety.
We pray for our staff and for our colleagues on both sides
of the aisle. As we work today on behalf of the American
people, know that the United States of America is a great
country when we work together.
In your name we pray, Amen.
Please join me in the pledge of allegiance.
I pledge allegiance to the flag of the United States of
America, and to the Republic for which it stands, one nation,
under God, indivisible, with liberty and justice for all.
Chairman WILLIAMS. Good morning, everyone.
And I now call the Committee on Small Business into order.
Without objection, the Chair is authorized to declare a
recess of the Committee at any time.
And prior to opening statements, I ask unanimous consent to
enter a letter into the record from the House Select Committee
on the Chinese Communist Party requesting to waive on today's
hearing.
Without objection, so ordered.
Pursuant to the rules of the House and the rules of the
Committee, I ask unanimous consent that Members of the House
Select Committee on the Chinese Communist Party be waived on to
the Committee for the purpose of making an opening statement
and asking questions.
And without objection, that is so ordered.
I now recognize myself for my opening statement.
I want to welcome everybody today to the hearing, Fostering
American Innovation: Insights into SBIR and STTR Programs.
I want to thank our witnesses today for being here. And
many of you traveled a long way to get here, and we are
interested in your perspectives and your experiences, and we
deeply value your time and your voice.
Small businesses are the backbone of innovation and
economic prosperity in America. The ability to take an idea,
develop it into a product, and bring it to the market drives
innovation and economic growth, strengthening our nation's
competitiveness.
For over four decades, the SBIR and the STTR programs have
fueled American innovation by providing early stage funding to
small businesses, allowing them to develop cutting-edge
technologies that strengthen our economy and support our
military. From lifesaving medical advances to next-generation
defense capabilities, these programs have empowered main street
to turn ideas into reality for the government and the private
sector.
The SBIR and the STTR programs channel federal R&D dollars
in phases to small business, enabling the development of
innovative ideas that align with the needs of federal agencies.
These agencies can offer SBIR and STTR awards through two
avenues. First, through targeted solicitations where the agency
requests a product that meets specific requirements, or through
open topics where small businesses propose innovative solutions
to meet an agency's mission.
Prominent companies, including Qualcomm, 23andMe, and Bose,
began as small businesses that leveraged the SBIR program to
become industry leaders demonstrating the program's power to
drive innovation and economic growth.
Our responsibility right here in Washington is to ensure
that these programs continue to foster groundbreaking
advancements while remaining free from foreign exploitation. In
today's hearing, we will examine these programs' challenges and
addresses and propose unresolved solutions from the last
reauthorization.
SBIR and STTR have long supported American ingenuity, yet
these vital programs still face growing threats. The CCP
continues to exploit the SBIR and the STTR programs, siphoning
taxpayer-funded research back to China. This undermines
American innovators' intellectual property rights and
jeopardizes our nation's national security.
The due diligence program established in the last
reauthorization continues to face limitations in effectively
preventing CCP infiltration. At the same time, small businesses
participating in these programs face significant barriers in
transitioning from research to commercialization, lacking
access to capital.
With SBIR and STTR set to expire in September 2025, we have
a critical opportunity to make changes to ensure these programs
operate efficiently and support small businesses' growth to
ultimately accomplish the program's goal of fulfilling R&D
needs.
Ensuring these programs are awarded by merit after rigorous
competition will continue driving the best innovations to the
top. Innovators thrive in an environment where competition
reigns supreme, where they are free from limitations or caps on
their success.
Working alongside the Trump administration, we will
continue to prioritize policies that protect our innovators,
cut bureaucratic red tape, and create an environment where Main
Street America can survive and thrive.
With that, I would yield to our distinguished Ranking
Member, my friend from New York, Ms. Velazquez.
Ms. VELAZQUEZ. Thank you, Mr. Chairman, for calling this
hearing to discuss one of our most important priorities of the
119th Congress: reauthorization to small business innovation
research and small business technology transfer programs. The
timing could not be more critical.
SBIR and STTR are among the federal government's most
effective engines for driving innovation. These programs
channel just a small percentage of extramural R&D budgets into
highly competitive awards that fuel cutting-edge discoveries,
create new industries, and drive economic growth.
At just under $5 billion annually, these programs have had
an outside impact on our economy, helping to launch companies
like iRobot, Sonny Care, 23andMe, and Qualcomm. They have
played a role in game-changing advances. From second-generation
LASIK eye surgery to critical mineral recycling that reduces
our dependence on foreign sources, to advancement that helps us
investigate the inner workings of the human brain, to studying
disorders like Alzheimer's and Parkinson's.
More recently, an SBIR-backed company, Boom Aerospace,
whose CEO testified in this room 3 years ago, conducted a test
flight that broke the sound barrier over the Mojave Desert.
With the help of SBIR and the private capital it has helped
attract, our countries' innovators are one step closer to
bringing supersonic passenger jet travel into reality.
Yet despite its overwhelming success, these programs are
among the only core SBA programs that are not permanently
authorized. If Congress fails to act before its expiration on
September 30, a lapse in the program will have severe
implications for American entrepreneurs. Even a short-term
disruption would deliver a substantial setback for America's
innovation pipeline.
Meanwhile, China is aggressively investing in its own R&D
ecosystem. Just last month, the release of the DeepSeek AI
model rattled global markets, exposing the complacency of the
dominant U.S. firms that have grown too comfortable with their
market power.
The SBIR program is uniquely positioned to counter this
stagnation, funding nimble, emerging businesses to challenge
entrenched tech giants and restore competition to the
innovation economy.
In many ways, Mr. Chairman, our task this year should not
just be about a simple extension of the programs but, rather, a
bipartisan collaboration to making SBIR and STTR stronger than
ever before. It is my greatest hope that we can work together
to grow the programs in several ways.
First, we must work to make the program permanent, giving
small innovators operating on the cutting edge of their
industries more certainty and stability to invest their time,
money, and staff into competing for SBIR or STTR awards.
Second, we must expand the programs, allowing for greater
agency allocation over time and growing the volume of small
business grants and contracts available. This will bring more
competition to our economy and our industrial defense base.
Third, we must work to help participating companies
overcome the valley of death by expanding commercialization
services and growing Phase III of the program.
Finally, we must continue protecting small business firms
from foreign threats that seek to undermine our national
security.
These are just a few of many priorities we can consider.
Thank you to all the witnesses for appearing before us
today, and thank you to the Chair and Ranking Member of the
Select Committee on the Chinese Communist Party for joining us.
I look forward to your testimony.
I yield back.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize the distinguished Chair of the House Select
Committee on the Chinese Communist Party, Chairman John
Moolenaar from the great State of Michigan, for his opening
remarks.
Mr. MOOLENAAR. Thank you, Chairman Williams and Ranking
Member Velazquez, for holding today's hearing on the small
business innovation research, as well as the small business
technology transfer programs.
And I want to thank you for allowing Raja Krishnamoorthi
and I to waive on to this important meeting.
The SBIR and STTR programs have long been instrumental in
fostering American innovation, allowing small businesses to
development cutting-edge technologies that serve both the
public and the private sectors. These programs are critical to
maintaining America's technological edge, particularly in
industries vital to our national security.
That being said, as we examine the effectiveness of these
programs today, we must also acknowledge the serious threats
they face; most notably, the Chinese Communist Party's
persistent efforts to exploit these programs for its own
military and economic gain.
China has systematically targeted American innovation using
tactics like talent recruitment programs, state-sponsored
investments, and university partnerships to siphon off U.S.
taxpayer-funded research. This is not just a matter of
intellectual property theft. It is a direct national security
risk.
Some U.S. firms that have received SBIR awards have later
partnered with CCP-linked entities or established Chinese
subsidiaries, effectively transferring sensitive technology
into the hands of our foremost adversary.
The CCP is actively seeking to integrate advanced U.S.
research into its military modernization efforts, including
through artificial intelligence, quantum computing, and next-
generation defense technologies.
As the September 30 reauthorization deadline approaches, we
must close the gaps that allow China to take advantage of the
SBIR and STTR programs. At the same time, we must not lose
sight of the core mission of SBIR and STTR supporting American
small businesses. Instead of limiting opportunities for small
businesses, we should focus on strengthening safeguards against
foreign exploitation while preserving a merit-based system that
rewards innovation.
The United States cannot afford to let China turn our most
successful small business research and development program into
a tool for its own strategic advancement. We must take decisive
action to protect SBIR and STTR from CCP infiltration and
ensure that taxpayer dollars are used to support American
innovation, not our adversary's.
And I am confident that under Chairman Williams and Ranking
Member Velazquez's leadership, this Committee will be
successful in doing just that. And the Select Committee on
China stands ready to support the Small Business Committee's
important efforts to protect American innovation, strengthen
our economic security and counterthreats posed by the Chinese
Communist Party.
And with that, Mr. Chairman, I yield back. Thank you.
Chairman WILLIAMS. The gentleman yields back.
And I now recognize the distinguished Ranking Member of the
House Select Committee on the Chinese Communist Party, Ranking
Member Raja Krishnamoorthi--but I know him better as the Raj--
from the great State of Illinois for his opening remarks.
Mr. KRISHNAMOORTHI. Well, thank you, Mr. Chairman.
And by the way, when I first--on my first day of college, I
introduced myself. I said, Hi, my name is Raja. And the person
said, What part of Boston are you from, Roger?
So in any case, wonderful to be with you. Thank you,
Ranking Member Velazquez, my good friend. And, of course, my
good friend and colleague and the leader of our Committee,
Chairman John Moolenaar, thank you for your leadership.
I want to take this opportunity to speak on the Small
Business Committee about the SBIR and STTR programs. In full
disclosure, as a former small business person, my former
company actually benefited from SBIR programs.
And I lived in the valley of death frequently. And so it is
not a pleasant place to be. And SBIR, thanks to the work of
this Committee and this government, we were allowed to benefit
from those programs, and we have developed technology for night
vision, both for space and for military applications, and it is
helping the warfighter today.
For decades, these programs have served as the backbone of
U.S. research and development, empowering small businesses by
turning new ideas into real technology. They have helped
advances in defense, energy, and medicine. And in a study from
1995 to 2018 revealed that these programs have created a
whopping 1.5 million jobs, averaging over 65,000 jobs annually.
These investments have led to breakthrough technology, such as
advanced prosthetics for wounded veterans, revolutionary
medical imaging systems, and cutting-edge cybersecurity
solutions.
I want to say I echo the sentiments of Chairman Moolenaar.
Our adversaries do know the strengths and weaknesses of our
innovation ecosystem and, on occasion, they have taken
advantage of it and targeted some of the beneficiaries of these
SBIR and STTR programs for intellectual property theft.
One notable example was a U.S. company that was a former
SBIR awardee that lost $1 billion in shareholder value and 700
American jobs after an employee stole wind energy technology
for a Chinese firm.
As another anecdote, I should just mention, Chair and
Ranking Member, when I was running this company in the private
sector that I mentioned before, we were actually the victims of
an attempted theft of intellectual property by CCP-controlled
entities as well. So I know this firsthand. It happens. And so
we have to do whatever we can to help small businesses ward it
off, prevent it, empower them to avoid being victims of CCP
intellectual property theft.
Congress and the executive branch have taken steps to
address and mitigate many of these threats. For example, the
SBIR and STTR Extension Act of 2022 was an important step
forward, requiring greater disclosure of foreign ties and
participation in talent recruitment programs. These efforts
have proven effective in increasing awareness and bolstering
protections, but we cannot afford to be complacent when it
comes to competing with the CCP.
As the SBA Inspector General's 2024 advisory makes clear,
our current system still relies heavily on self-reporting from
companies, which can lead to resource constraints for the
government to verify these reports. We must continue to support
resources for due diligence so that we can see the results we
enacted back in 2022.
Finally, and above all, we must recognize that federal
funding for research and technology development is not just an
investment in the present; it is a commitment to our nation's
future.
And actually, Chairman Moolenaar and I just met with
Condoleezza Rice yesterday of Stanford, who heads the Hoover
Institution, who brought a number of researchers to our office
to talk to us about the technology competition and the fact
that the only way that we are going to win this competition is
for the federal government to invest in basic research and
development, supplemented by these additional investments in
SBIR and STTR, which build upon progress, the blue sky
research, in the private and public sector.
I just want to say thank you so much, Chairman Roger. And
thank you, Chairwoman Velazquez and Chair John Moolenaar, for
your leadership, your partnership, your collaboration. Together
we are going to win this competition, this strategic
competition against the CCP.
Thank you, and I yield back.
Chairman WILLIAMS. The gentleman yields back. Thank you for
that.
And I will now introduce our witnesses.
Our first witness here with us today is Dr. Bill Marinelli.
Dr. Marinelli is the president and CEO of Physical Sciences
Inc., located in Andover, Massachusetts. Dr. Marinelli joined
Physical Services Inc in 1983, and has been involved as a
scientist and program manager in a diverse range of technical
areas.
In 2006, he was named executive vice president for defense
systems. In 2018, he became chief operating officer for the
company and was named to the board of directors in 2021. Dr.
Marinelli then assumed the title of president and CEO in 2022.
Dr. Marinelli has made numerous contributions in the fields
of chemical kinetics, gas service interactions, space physics,
and advanced diagnostics.
Dr. Marinelli received his MS and Ph.D. degrees in physical
chemistry from the University of California at Berkley. He is
also a graduate of Brown University where he earned a degree in
chemistry.
I want to thank you for being with us today, and looking
forward to your conversation.
Our next witness here with us today is Ms. ML Mackey. Ms.
Mackey is the CEO of Beacon Interactive Systems located in
Waltham, Massachusetts. Ms. Mackey has co-founded Beacon
Interactive in 1994 and, along with her partner, has grown the
business into a valued nontraditional defense contractor.
And throughout her time, Ms. Mackey has won multiple
awards, such as the WES Leadership Award, the Tibbetts Award,
Small Business Executive of the Year, Small Business Advocate
of the Year, and Champion of Small Business Innovation.
Ms. Mackey serves as the ExCom of NDIA's board and is the
Chair of the Small Business Division. She is past Chair of NSBA
and a current member of SBA's innovation advisory committee and
the National Academy of Sciences, Army S&T Roundtable.
Ms. Mackey is a graduate of Lehigh University with a
Bachelor's of Science in Electrical Engineering.
I want to thank you for being here also today.
Our next witness here today is Mr. Cyrus Miryekta. Mr.
Miryekta is the founder and CEO of Ravelin US, located in
Fairfax, Virginia. Mr. Miryekta founded Ravelin in 2023 to
serve as a strategic consulting firm for the USG-inclined
innovators. And prior to Ravelin, he was with the Air Force
Office of Special Investigations and spearheaded the Department
of Defense counterintelligence in Silicon Valley.
He enlisted in the U.S. Army in 2000 and served as an
airborne fire team leader in Afghanistan and in Iraq, where he
was decorated for actions under fire and for saving a civilian
from an IED.
He serves as board member for the BlackStar Orbital and
Tigercat Cyber, as well as board advisor for TerraSpace. He
also has worked as a volunteer to set up medical clinics in
rural Guatemala where over 1,000 children have been treated a
week.
He holds a Master of Arts Degree in Statecraft and National
Security from the Institute of World Politics. He is also a
graduate of the National Security Space Institute and
California State University where he received a bachelor degree
in political science and government.
I want to thank you for being with us today, and I am
looking forward to all of the testimony.
And I now recognize our Ranking Member from New York, Ms.
Velazquez, to introduce our last witness appearing before us
today.
Ms. VELAZQUEZ. Thank you, Mr. Chairman.
Our final witness today is Mr. Jere Glover, the Executive
Director of the Small Business Technology Council, a trade
association of small, high-tech companies, most of whom are
involved in the Small Business Innovation Research program. As
counsel to the House Small Business Committee, he directed and
organized a set of hearings on small business and innovation
that laid the groundwork for the program in 1978. Throughout
the law's existence, he has been one of its most active
supporters.
Mr. Glover has a unique blend of public and private sector
experience. For more than 6 years, he was the federal
government lead defender of small businesses in the regulatory
process. In the private sector, he has been the CEO or
principal of a biotech company and medical technology company
and a group of medical clinics.
He obtained his undergraduate and law degrees from the
University of Memphis and an L.L.M. in Administrative Law and
Economic Regulation from George Washington University.
Thank you, Jere. We look forward to your testimony.
Thank you, Mr. Chairman.
Chairman WILLIAMS. The gentlelady yields back.
Before recognizing the witnesses, I would like to remind
them that oral testimony is restricted to 5 minutes in length.
If you go over 5 minutes, you will hear the gavel a little bit,
and you need to bring it to a close. If you see the light turn
red in front of you, it means your 5 minutes has concluded, and
you should wrap it up quickly.
Also, I would like to add, periodically, you will see some
of us moving in and out. It is no reference on your testimony
or anything, but some will have other places they have got to
be real quick and come back. You may see the Ranking Member and
myself do that, but we will be back. Okay? So that means
nothing.
So I now recognize Mr. Marinelli for his 5-minute opening
remarks.
STATEMENTS OF MR. BILL MARINELLI, PRESIDENT AND CEO, PHYSICAL
SCIENCES INC.; MS. ML MACKEY, CEO AND CO-FOUNDER, BEACON
INTERACTIVE SYSTEMS; MR. CYRUS MIRYEKTA, CEO, RAVELIN US; AND
MR. JERE GLOVER, EXECUTIVE DIRECTOR, SMALL BUSINESS TECHNOLOGY
COUNCIL
STATEMENT OF MR. BILL MARINELLI
Mr. MARINELLI. Good morning, Chairman Williams, Ranking
Member Velazquez, and Members of the House Committee on Small
Business. It is an honor to testify here today on behalf of
Physical Sciences Incorporated, a small business headquartered
in Andover, Massachusetts. I want to thank you for the
opportunity to talk about our experience with the SBIR program.
Our company was founded in 1973, with a mission to develop
technical solutions for national priorities in defense,
security, energy, environmental, healthcare, and industrial
markets. The company is 100 percent owned by an employee stock
ownership trust, has no foreign ownership interest, and takes
active measures to prevent foreign technology transfer.
Our company embraces the key intent of the SBIR legislation
to meet federal research and development needs while
identifying commercial applications for those highly
specialized technologies. Four examples include: One, advanced
Lithium-ion battery technology to support two Navy programs of
record where their operational requirements exceed commercial
standards.
Two, rare earth extraction from coal ash to provide a
secure domestic supply of these critical elements. We developed
and patented that technology under SBIR and non-SBIR programs.
And funding for a $30 million pilot plant has now been awarded
to Pennsylvania's Winner Water Systems in conjunction with the
southern company.
Radiation detection technology to secure our borders
against trafficking in this threat. The technology we
manufacture currently provides detection capability to several
ports of entry along the southern United States, as well as to
federal, state, and local law enforcement agencies in the U.S.,
the U.K., and select overseas locations.
And finally, remote natural gas leak detection technology
developed for use by the natural gas industry. Over 7,400 of
those systems have been sold under license to PSI.
The key point is that component technology funded by SBIR
awards from multiple agencies and facilitated by significant
investments by PSI and facilities and select capabilities was
employed to meet these needs.
We have reported over $677 million in Phase III academic--
economic activity to the SBA, about half of which is actual
commercial sales from licensed technology by our partners. Only
$5.8 million of those funds are formally listed as Phase III
awards, illustrating the erroneous and misleading conclusions
that can be drawn by simplistic studies that purport to capture
the program's total economic activity.
Looking at reauthorization, we believe the primary SBIR
reauthorization challenges is to reduce barriers to entry and
not restrict program participation. Reauthorization should
reinforce five basic principles, and I think you have heard
some of them already today.
First, merit-based awards. Congress should maintain the
competitive merit-based fundamentals of the program to ensure
that the best technology is developed. The GAO review of the
program showed that there were no SBIR mills and that the
intent of the program is being met. There should be no
arbitrary award caps, submission limits, or forced graduation.
Second, agency discretion. Agencies should have the
discretion to shape the program and to find merit consistent
with their missions. Multi-award winners should not be
penalized for some agencies' lower rate of adoption and
commercial potential.
Three, improved communication. Agencies should improve the
communication of their needs and opportunities across all topic
types to enable companies to tailor their proposals to meet
those specific needs, improve their potential for award, and
support subsequent technology transition.
Four, application simplification. The largest barrier to
participation in the program for new entrants is increased
administrative burden and complexity of proposal submission.
Per capita, proposal submission rates from underserved regions
of the country are some of the lowest in the program reflecting
those barriers.
And finally, permanent authorization. The GAO identified
investments and dedicated capabilities as key to receiving DOD
awards and to being viewed as a reliable supplier by our
customers.
Program permanency reduces the concern that those
investments will be stranded at the next reauthorization
without limiting the ability of Congress to make further
adjustments to the program.
In conclusion, there are many pathways for commercial
success. The U.S. Government should be open to innovation from
all small business sources and not limit participation to
certain pathways. Doing so would undermine the ability to
secure the very best technology for its priorities.
Thank you very much.
Chairman WILLIAMS. The gentleman yields back.
And, Ms. Mackey, you have 5 minutes.
STATEMENT OF MS. ML MACKEY
Ms. MACKEY. Chairman Williams, Ranking Member Velazquez,
and distinguished Members of the Committee, thank you for
inviting me to speak today on the importance of the SBIR/STTR
programs. My name is ML Mackey. I am the CEO of Beacon
Interactive Systems, a nontraditional and unconventional
defense contractor delivering innovative, efficiency-improving
digital capabilities to our military services.
I am here today in my capacity as the Chair of the Small
Business Division of the National Defense Industrial
Association, NDIA. I also serve on the executive committee of
NDIA's national board of directors.
For over 100 years, NDIA has provided a forum for
government and industry leaders to collaborate and address
complex defense issues. NDIA and its affiliates represent over
1,700 defense companies of all sizes and sectors, the majority
of which are small business.
NDIA has been a longstanding and vocal supporter of the
SBIR and STTR programs and regards these programs as some of
the nation's most effective tools in bringing cost-effective
and valuable innovations to the DOD.
We appreciate your leadership in extending the programs
through September 30, 2025, and we strongly endorse your
efforts to further extend the programs before the current
authorization expires.
The SBIR/STTR programs facilitate and effectively
streamline the participation of competitive small businesses to
work on agency-specific research and development needs.
Speeding innovations and advanced capabilities to our
warfighters is critical to the DOD's efforts to outpace the
People's Republic of China and other potential competitors in
this era of great power competition.
In my own personal experience as the CEO of Beacon
Interactive Systems, we found the SBIR program to be a gateway
by which we could enter the defense marketplace. We have
delivered multiple programs of record, deployed systems across
200-plus ships, submarines, and carriers, and multiple shore-
based locations worldwide. Our digital products transform
operations at the edge.
In one example alone, early estimates predict our flight
line platform will save an hour and a half per maintainer, per
shift. This tremendous impact on operational capacity was
critically nurtured with SBIR investment.
Based on this positive experience and similar experiences
from my colleagues in NDIA's Small Business Division, we offer
the following three areas for review to enhance the SBIR/STTR
programs.
Our first recommendation. The SBIR/STTR program should be
permanently authorized. These programs inspire technical
innovation and inject a vital sense of entrepreneurship into
the defense enterprise. Establishing them permanently is the
next logical step. SBIR and STTR are an essential part of
America's innovative high-tech ecosystem, and even the threat
of a short-term disruption can severely affect smaller high-
tech innovators. The temporary nature of the current programs
also does not signal stability to both the federal agencies who
administer them and the small businesses seeking to participate
in these programs.
Our second recommendation is to provide more support for
Phase III awards and transition to commercialization. In line
with the SBIR policy directive--SBIR. I always use the slang.
In line with the SBIR policy directive, the government is
required to the greatest extent practicable to award follow-on
efforts to the SBIR investments already made in the capability.
This is both an efficient use of federal funding and a
significant incentive for new entrants to the U.S. defense
industrial base.
Attracting and retaining new companies that can rapidly
deliver innovative technologies and capabilities to the
warfighter is a critical element to building a modern, diverse,
and resilient U.S. defense industrial base. The technologies
these companies deliver can also provide the decisive advantage
needed to deter or win a fight.
DOD acquisition program should review prior SBIR/STTR
projects and assess opportunities to utilize these investments.
If the federal government already has access to an existing
technology that is purpose built, meets the competitive
threshold, and addresses the requirement, it should not expend
additional funds to procure and then duplicate the same
technology. Besides saving money, this review would also save
time, as the DOD can leverage the agile authorities of SBIR
Phase III contracting to acquire those technologies and deliver
to the warfighter sooner.
It would be a disservice I think to my colleagues if I
inadvertently contributed to the perceived SBIR issue of
``vendor lock'' here. So I want to talk about how important it
is that the SBIR policy directive says ``to the greatest extent
practicable,'' and if it is not practical, tell us why.
Document it so that we know--we, as the small businesses--know
how to improve, and we, as taxpayers, know that you have looked
for what you already have on the shelf.
The third recommendation that we have is to increase agency
oversight of implementation and agency employee accountability.
In my submitted written testimony, we have fair amount of
detail on what kind of training we think would help with that.
But in conclusion today, I want to first applaud this
Committee for your vigilance in promoting small-business-
friendly policies. Your work to defend deliberate and efficient
approaches to include small business high-tech innovators in
the U.S. defense industrial base is a valuable proposition for
the government and a direct enabler of innovation and growth.
I appreciate the opportunity to be here today, and I
welcome any of your questions.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Miryekta for his 5-minute opening
remarks.
STATEMENT OF MR. CYRUS MIRYEKTA
Mr. MIRYEKTA. Chairman Williams, Ranking Member Velazquez,
distinguished Members of the Committee, thank you for having me
here today.
I am here to discuss the Chinese Communist Party's
exploitation of American innovation with a focus on SBIR
programs.
Historically, America has had three offset strategies, and
an offset strategy is a strategy to defeat a military peer
should deterrence fail.
The first offset strategic was nuclear weapons. In 1949,
the Soviets test their first bomb. We lose that edge almost as
quickly as we got it.
The second offset strategy was net warfare, which we
revealed to the world in Gulf Storm in 1991, where we
interlinked air, land, sea, and space forces for precision
strikes. If you read modern Chinese and Russian strategies
today, you will see it is largely predicated on what they saw
in 1991. Fast-forward to the present, it is why Russia and
electronic warfare is so effective in the Ukraine. They spent
40 years mastering its asymmetrical capability.
The SBIR program has an outsized impact for the third
offset strategy, which is the rapid incorporation of innovation
into the Department of Defense to defeat a peer adversary.
Innovators in America are largely people in their late 20s,
early 30s, known for their irreverence and informal apparel,
and they have become the vanguard of our fight with the CCP.
I have had the honor of serving my country for 16 years,
first as a paratrooper in Afghanistan and Fallujah, Iraq. I
went to university on the Montgomery GI Bill. I infiltrated a
closed career fair to join the intelligence community. I
volunteered for an assignment in Central California in 2014
when I realized DOD had no counterintelligence support to its
equities in Silicon Valley.
For nearly a decade, I provided counterintelligence support
to startups, Fortune 50 companies, FPGA design houses, and
academic institutions. I set up the counterintelligence
programs at Defense Innovation Unit, experimental at the time,
AFWERX and SPACEWERX. For my impact to U.S. national security,
I have been awarded an unprecedented nine national intelligence
awards.
Although, I am not here to talk about my government
service, this legacy informs the company that I run today,
which is an advisory firm called Ravelin US. We specialize in
helping U.S. innovators identify foreign ownership, control,
and influence issues, and then how to mitigate and/or remove
them.
The Chinese Communist Party has also evolved in its tactics
against the United States. I have witnessed this over the last
12 years. There is this misconception that cyber exploitation
vastly outweighs HUMINT exploitation, which couldn't be more
wrong. HUMINT collections, the exploitation of our people and
systems, is far more ubiquitous than what we face in the cyber
realm.
The CCP will use real relationships curated over a decade.
I had one last week that was 10 years before they ever deployed
capital into the innovator's company.
We will also see the CCP investors and their affiliates
investing in SBIR recipients who struggle to go from Phase I to
Phase II.
There is a grooming process, and it is like slow-boiling
the target. There is no official signing up to become an asset.
It is a gradual process that occurs over time.
We also see American investors who are investing in
genocide-enabling technologies against the Uyghurs in the
Xinjiang province. Those same investors will be investing in
munitions innovators that have received SBIRs on U.S. soil.
When the Chinese Communist Party wants innovative
capability, they will often work through proxies. Sometimes
that means allied countries, usually through U.S. citizens. And
when they have a capability that they want us to deny
ourselves, they will loudly deploy Chinese Communist Party-
affiliated capital knowing that our due diligence systems will
find it, we will identify it, and we will not use the
capability as a department. It takes a nuanced eye to identify
and to remove, but yet, essentially, a poison pill of CCP
investment in our systems.
This is not really the worst thing. In fact, if your
adversary is forced to adjust their tactics and deal with your
strategy, that means you are having an impact. And right now,
we are far ahead of them, and we need to intensify our efforts.
The impact of the SBIR program vastly outweighs the dollar
amount and it steers the industry. The SBIR/STTR Extension Act
that went into effect in July of 2023, has changed the American
innovative landscape.
Not all of the due diligence teams that are required to do
the FOCI due diligence are the same. In fact, you have one team
that is better than all the other teams combined and still way
out far ahead. But we cannot look at specific teams and say
whether the program is working or not. It is actually
quantifiable, and we can figure that out.
We do have some recommendations for the Committee. I know I
have a very cumbersome last name, and I would encourage you to
call me Cyrus.
The SBIR/STTR program is critical to executing our third
offset strategy, which is to ensure American hegemony in the
21st century.
I look forward to your questions.
Chairman WILLIAMS. Thank you, Cyrus.
And now, Mr. Glover, you have your 5-minute opening
remarks.
STATEMENT OF MR. JERE GLOVER
Mr. GLOVER. Thank you, Mr. Chairman, Ranking Member
Velazquez, Members of the Committee. It is an honor to be here
today to talk about reauthorization of the SBIR/STTR programs.
Today, I want to share with you a remarkable congressional
government story. Forty-seven years ago, this Committee,
together with the Senate, held joint hearings on small business
and innovation. The Committee found that small business was, by
far, the most innovative sector of the U.S. economy, creating
two-thirds of all major inventions, but that virtually none of
the federal R&D dollars went to small business.
It was almost impossible for a small business to get
government R&D contracts. The contracting officers were much
more comfortable giving R&D contracts to large businesses. Even
today, the largest prime contractor at DOD receives 10 times
more than the entire SBIR program in funding.
The Small Business Committee asked commonsense questions.
How can the government get better R&D by asking the most
innovative and entrepreneurial sector of America to do it? And
how can this make America stronger? The answer was the SBIR
program, and Congress enacted it to unleash the ingenuity and
drive of small business on America's technology challenges.
Today, the SBIR program is the best government R&D program
in the world and one of the most significant pieces of
legislation ever passed.
What are the results for the taxpayers in SBIR? Thousands
of new innovative farms and thousands of success stories,
including technologies used today, such as Bluetooth, cell
phones, electric cameras, GPS on a chip, thousands of medical
breakthroughs, drones, all solutions that small business
created and took to the marketplace.
Here are some of the highlights. SBIR generates $2.50 for
every dollar in tax income at State and federal levels from
every dollar at DOD, and $3,68 for every dollar spent at the
National Cancer Institute. Return on investment is 22 to 33
percent for every SBIR dollar, depending on the agency.
Over 2,000 SBIR firms have been acquired, injecting
innovations into larger companies. Ninety-nine new drug
approvals in the last 20 years. Twelve percent of all new drug
approvals companies had funding from the SBIR program. Sixteen
percent of the priority drugs had approval. 200--24,000,
510(k)s or premarketing approvals had SBIR involved. Ten
percent of all venture capital funds go to SBIR programs. The
SBA agency website lists hundreds of other SBIR success
stories.
The program focused on merit with agencies selecting the
best solutions to keep quality high and competition tough. Only
1 in 20 proposals get to Phase II.
In 2017, GSA began writing contracts for other agencies,
SBIR contracts. This was a major breakthrough. Five years
later, GSA actions doubled the SBIR Phase III identified
contracts from 1.5 billion to 3.5 billion. Their proposed IP3
program, which is pending, would make a great success story.
When we look at China today, unfortunately, China leads in
57 of 64 critical technologies. U.S. is even behind Europe.
Europe spends 20 percent on its small businesses, twice what
the U.S. spends.
Congress can take a number of actions to build on these
successes. One, require better streamlining and simplification
of the process, keeping merit-based to ensure the program
continues to fund the best research, double the SBIR program,
leveraging small businesses to provide innovations to solve
federal challenges.
DOD's Section 809 panel and the past Secretary of Defense
recommended doubling the allocation. Restore the 174 tax
deduction. That is critical for not only SBIR companies but all
small innovative businesses. Reverse the slowdown of contracts
and grant selections and awards, which may be fatal to many
small firms. Cash flow kills startups.
Make the SBIR program permanent, and these actions will
help America regain its leadership in the world of innovation.
Thank you.
Chairman WILLIAMS. Thank you, Mr. Glover.
We will now move on to the Member questions under the 5-
minute rule.
I recognize myself for 5 minutes.
Dr. Marinelli, the SBIR and STTR programs were created to
support small business growth by helping federal agencies
fulfill those needs. My question is, as a small business owner
myself and yourself, how important is it to ensure that the
SBIR program remains merit-based, as we talked about?
Mr. MARINELLI. Mr. Chairman, last September, I had the
privilege to visit four of the five landing beaches at
Normandy, sat on a German reinforcement and looked at the Omaha
Beach. I went to the American cemetery afterwards and happened
to visit the grave of someone important to my wife's family. It
was truly a sobering experience.
Cyrus talked about the second offset. That battle was a
force on force in Normandy. We were able to kick Iraqi forces
out of Kuwait in a week because of the second offset.
It is American technology that is going to give us the
third offset.
My father actually fought in the Korean war as an artillery
officer. We need to not have to fight those kinds of battles
ever again. We need to get the best technology from the best
sources, no matter where they are, anywhere in the country, to
establish and maintain that third offset. Otherwise, we are
going to wind up fighting these battles in a way that we don't
want. We want to be able to deter foreign forces from ever
starting a fight like that, and we want to make sure we can win
it if it does start.
So I think it is very important for our nation's security
to make sure that merit is driving technology into our Armed
Forces and everywhere else in the U.S. Government.
Chairman WILLIAMS. Thank you.
Ms. Mackey, the valley of death has been a challenge for
small businesses in the SBIR/STTR programs. This is when an
innovation moves from the R&D stage into production. But small
businesses lack access to capital--we have talked about that--
to commercialize their product.
In your written testimony, you mentioned that the DOD and
other agencies should buy existing SBIR/STTR technologies,
particularly during Phase III, transition to commercialization.
So can you explain how the agencies could more effectively
integrate SBIR-funded innovations into the procurement process
and how this might save both time and money in the development
of new technologies?
Ms. MACKEY. Thank you for the question. I think we don't
have to do new legislation. I don't think we need to come up
with how to do this. We need to make sure that it gets done,
and we need to insert into the acquisition process the step of
reviewing what do we have. And to be fair, there is a lot that
we have.
So even a good due diligence of what we have available and
documenting that that has happened. We need to change behavior
in the acquisition programs so that they look for components
that they can successfully insert into their larger programs.
I think this does what you were talking about in terms of
bringing innovation forward and making things faster. It also
helps address a lot of the adversarial impact that we have.
If you have a company that is developing good technology,
and you have a reasonable path forward, you are less likely to
take global investment that may have competitive interest.
Chairman WILLIAMS. Okay. I have got a limited amount of
time.
And, Cyrus, as you know, there is a growing concern that
the CCP is leveraging various mechanisms, such as talent
recruitment programs, the U.S. patent system, and venture
capital investments to access sensitive IP developed through
SBIR-funded research.
In your experience, how is China specifically acquiring IP
from the SBIR-funded small business? And what are the primary
methods you have observed being used to exploit these small
businesses?
Mr. MIRYEKTA. Thank you, Mr. Chairman. So when it comes to
venture capital, we see investment post-receipt of a SBIR. That
is one of the methods. Another is working through U.S. firms.
So it would be a U.S. firm without linguistic or cultural ties
to China. They will mobilize them through money.
We have seen this also with the Canadians where they will
use a Canadian to be an investor, but when you look at the
Canadian's LPs, it all comes from one CCP fund, and then that
individual is trying to oust the CEO of a company and move that
technology to China.
And this is all done--it is bank rolled by the Chinese
Communist Party. They did it once successfully with a biotech
company, and now they were trying to do it with an aerospace
company.
And so working through allies, working through third
parties trying to obfuscate their hand because they know that
we are looking for it. And then also working through U.S.
citizens, whether they are ethnically Chinese or otherwise.
I yield my time.
Chairman WILLIAMS. The gentleman yields his time back.
And I now recognize the Ranking Member for 5 minutes of
questions.
Ms. VELAZQUEZ. Thank you, Mr. Chairman.
Thank you for your testimony.
Mr. Glover, one of the most important legislative tasks of
this committee this year is to reauthorize the SBIR and STTR
programs. Why is it important to make these programs permanent?
Very briefly, please.
Mr. GLOVER. Because every time this stop and start, the
government starts shutting down, there are delays. Whenever
there is a delay in awarding a contract, small businesses fail.
They simply don't have the cash flow to carry them over to the
next one. So every time this happens, it slows down the
government, makes the government less efficient. But it also
gives small businesses--sometimes the valley of death just gets
so long they can't survive. And so this stop and starting is
just very bad for the program.
Ms. VELAZQUEZ. Thank you.
To the panel, yes or no, do you agree that we should make
SBIR/STTR permanent?
Mr. MARINELLI. Yes, ma'am.
Ms. VELAZQUEZ. Ms. Mackey?
Ms. MACKEY. Yes, definitely.
Ms. VELAZQUEZ. Cyrus?
Mr. MIRYEKTA. Yes, ma'am.
Mr. GLOVER. Yes.
Ms. VELAZQUEZ. Thank you.
Mr. Glover, in your testimony, you focus on the
overwhelming success of the programs. Yet for many years they
have only accounted for a sliver of federal R&D funding.
Is it time for Congress to consider significantly expanding
agency allocations for the SBIR and STTR programs?
Mr. GLOVER. It is. When we look at Europe, they are doing
twice as much as we are, and they are getting ahead of us in
critical technologies. It is the most effective program going.
Yes, it is time to make it better and bigger and more
efficient.
Ms. VELAZQUEZ. Thank you.
Ms. Mackey, your company has been successful in
transitioning early-stage technologies into programs of record
at the Department of Defense. As we focus on prioritizing
commercialization, what can we do to improve the process for
earlier stage awardees?
Ms. MACKEY. I think for earlier stage awardees we can
improve the process by, specifically in the Department of
Defense, exposing them to actual warfighters and getting the
real feedback into what they are building.
I also think that we could change the process to add the
responsibility and the credit for transition to not only the
small business but the extended government team that also has
to work with them, and other industry partners.
Ms. VELAZQUEZ. Thank you.
Mr. Marinelli, some of the firms in the SBIR programs have
come under fire for having lower transition rates. Can you
explain why it may not be beneficial to the DOD to arbitrarily
use transition rates to measure success?
Mr. MARINELLI. So, Congresswoman Velazquez, one of the
things that we tend to work on is insertion of component
technology into large platforms. It takes a decade to evolve
and lasts for many years. And that is a very slow process.
Program managers are accepting a lot of risk to try and
insert new technology into those programs, and often they are
budgeted years in the future with very strict requirements. And
so it is very difficult often to insert that technology. We
have to work very hard in order to do that, and often it
doesn't happen. Sometimes programs get canceled in midstream.
And I think those are the issues. It is just a very hard
business, basically, to be in.
Ms. VELAZQUEZ. Thank you.
Mr. Glover, the SBIR and STTR programs have grown
significantly over the years, now accounting for nearly $5
billion in the federal budget. Yet, at the same time, the Small
Business Administration, whose responsibility it is to
administrator the program, has not seen a similar increase in
funds.
Can you explain why we should find ways to bring the SBA
more funding for program administration?
Mr. GLOVER. The SBIR program is now one of the biggest
programs administered by SBA. When it first started, there were
17 employees overseeing SBIR. I think there are three now. It
is in dire need of--it can't do everything and it can't oversee
and make sure the agencies do much more in Phase IIIs and
follow on and provide that. So it is critical that we bring it
in balance.
You look at some of the other programs at SBA. They are
much better staffed. For some reason this has always sort of
been a stepchild.
Ms. VELAZQUEZ. Thank you.
Thank you. I yield back.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Stauber from the great State of
Minnesota for 5 minutes.
Mr. STAUBER. Thank you, Chairman Williams and Ranking
Member Velazquez, for holding this important hearing today.
And thank you to our witnesses for taking time to share
your expertise to us.
You know, the United States Government relies on innovative
solutions to meet mission critical demands, and small
businesses play a pivotal role in that process.
Many small businesses rely on the SBIR and STTR programs to
bring their ideas from concept to reality, strengthening our
national security, and creating high-quality jobs.
We have heard from small businesses that while SBIR funding
is invaluable, the path from research to commercialization
remains difficult. Many companies struggle to secure private
investment or navigate federal procurement processes to bring
their innovations to market.
If these small businesses cannot transition successfully,
we do risk losing key technologies to bureaucratic hurdles or,
worse, foreign competitors.
Dr. Marinelli, your company has successfully navigated the
SBIR program. What improvements would you like to see in the
SBIR program to ensure continued innovation and successful
commercialization?
Mr. MARINELLI. Well, I think the most important thing that
we can do for all companies involved is to improve
communication of the federal government's needs to the various
performers that are performing on the program. It is pretty
critical there.
A lot of new entrants don't know what is happening, and if
they hear from program officers what is needed, they can tailor
their proposals in order to meet those program officers' needs.
Mr. STAUBER. How do you get to the needs right now? How are
you aware of the needs?
Mr. MARINELLI. So earlier in my career, used to be the
acquisition organizations and the S&T organizations would have
briefings for industry. The joint program officer for chem/bio
defense and DITR would. And they would stand up and tell you,
here is what we need to acquire. Here is where the S&T focus is
to do that.
That was enormously informative to me, and, actually, I
brought that back to our company. It is one of the reasons we
have grown. I think we need to see more of that throughout the
federal government to let people know what is needed by the
organizations.
Mr. STAUBER. Right. Thank you.
One of the most alarming threats to American innovation is
the growing evidence that China is actively working to exploit
SBIR-funded research. We have seen reports of Chinese firms
using venture capital investments, research partnerships and
talent recruitment programs to siphon technology developed with
U.S. taxpayer dollars, just as Representative Moolenaar stated.
If we do not take stronger measures, we risk
unintentionally fueling China's military and economic ambitions
at the expense of our own national security.
Mr. Miryekta, how is China leveraging venture capital
investments and SBIR-funded companies to gain access to
sensitive technology? And what steps can Congress do to prevent
this?
Mr. MIRYEKTA. By the virtue of being innovators, the way
that companies are set up, nothing is classified yet. So it is
very easy if a CCP-affiliated investor puts even a tiny amount
of capital in, not just as the investor themselves but even as
one of the limited partners, the fact that they have any
affiliation or access to the company means that they can start
collecting on the people in it.
And there was an example brought up by the Ranking Member
of the Committee on the Chinese Communist Party earlier, which
is American Superconductor Corporation, where exactly that
happened. All they needed was access to the company personnel.
Then it goes to a department in the PLA that does target
packages, finds out who has access, who is the most vulnerable,
whose vices aren't in check. And then they send PLA 2, which is
Chinese Communist James Bond. They go in and they flip the
target and are able to extract what it is that they are looking
for.
But by virtue of just having access to the individuals,
some of the companies we see are targeted through Cold War era
tactics, break-ins. And we mean like 11 cars are broken into, 7
laptops are stolen, all for one new energy company. Their
executive's travel is all marked and prepared for when they
arrive.
So it is everything from grooming the target, and it is
very pleasant, to old-style illegal activity.
Mr. STAUBER. As President Trump says, they are ripping us
off, and it is unacceptable. The SBIR/STTR programs are
critical to ensuring small businesses remain the driving force
of American innovation.
However, we must continue strengthening them by reducing
bureaucratic barriers, enhancing security protections, and
improving pathways to commercialization. This is about
maintaining our competitive edge while safeguarding taxpayer
investments. And I look forward to working with my colleagues
to ensure these programs continue to serve America's best
interest.
Mr. Chair, I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. McGarvey from the great State of
Kentucky for 5 minutes.
Mr. MCGARVEY. Thank you very much, Mr. Chairman.
And this is something that we have seen firsthand in my
district for a long time. I want to talk a second about part of
my district in Louisville called Rubbertown. And this really
came from in--in the war, in World War II, in the 1940s.
We noticed a severe lack of synthetic rubber available to
our troops and located massive factories in Louisville,
Kentucky, where almost all of the synthetic rubber used during
the war came from a small neighborhood right there on the Ohio
River. Throughout that war, we saw synthetic rubber, nuclear
fission, radar, cryptography, so many other technologies that
were highly classified. And classified advancements like those
that came out of SBIR and STTR programs today are much more
difficult to patent due to their sensitive nature.
And we know exactly what we knew during World War II, that
we are in a strategic power competition with adversaries
overseas. In 2021, the U.S. National Security Commission for
Artificial Intelligence reported to Congress and the President
that, for the first time since World War II, America's
technological dominance, the backbone of our economic and
military power, is under threat.
Ms. Mackey, you stated that innovation is critical to DOD's
efforts to outpace China and other near-peer competitors. But
we also know that contracting at DOD can be especially
difficult for small businesses. Can Congress improve how the
SBIR program provides a pathway for small businesses into
government or provides on-ramps to grow?
Ms. MACKEY. Yeah. I think I would answer that with two
statements. The first is absolutely, we can do more to make
sure that there is a consistency in how we engage with
component tech insertion of innovation and to the contracting
process.
The second piece that I would put out is this whole
infusion of capital--excuse me--is really important to high-
tech innovators to small business startups. I love this trusted
capital initiative we had for a while. I think it is really
important.
My oldest is starting a business, and as she is very
interested in getting VC from American Capital, it is not easy
to figure out what is what. So I think one of the things we can
do is help with the contracting, and I think we can also help
with the Department of Defense articulating who is trusted
capital and how do you know how to engage with trusted capital.
Mr. MCGARVEY. And, just on those capital guidelines, what
would you recommend along that front specifically?
Ms. MACKEY. I would recommend a lot of the work that the
SBA and Office of Strategic Capital just finished around how do
you identify investors that are American-owned and intend to
stay American-owned, and I think probably Cyrus could give you
some more specific examples on that.
But, from an industry perspective as a small business
owner, that would be so helpful. Even as a mature business
owner, it would be helpful to me, but as a startup, it would be
really helpful.
Mr. MCGARVEY. Because if you are starting up, it is--it is
difficult to untangle all that yourself and then, of course----
Ms. MACKEY. I am just saying there is a few things you are
thinking about, right?
Mr. MCGARVEY. There is a few things going on. Thank you. I
appreciate that a lot.
Mr. Glover, wanted to ask you a question. The current
administration is targeting budget cuts for agencies like NIH
and NSF, who host these SBIR programs.
Would these cuts make it possible to fund the necessary
security advancements we need to combat the IP theft we are
talking about today?
Mr. GLOVER. It will be a significant problem. We have led
the world in innovation because we spent money on it. But other
countries are now spending more money proportionally than we
are. Even France has a program to fund transition technologies.
We are getting left out. And, if we take a serious step
back on that, not only will health and safety be a challenge,
but also our defenses will not be as strong and sufficient.
Research needs continuity. It needs consistency. And, when you
make it erratic and uncertain, then you lose a generation of
people who simply decide that the U.S. is not the place to
develop their technology.
We have got lots of people who come to America to develop
their technology. And you just look around, you find them
everywhere. And that is--if we lose that leadership role, it
will be a long term. And cutting things right now and making it
erratic, just delaying contracts for months, when you don't
have the cash flow, we are going to lose companies. And those
companies won't come back----
Mr. MCGARVEY. No.
Mr. GLOVER.--or they will turn somewhere else to get the
money.
Mr. MCGARVEY. Yeah. And I think when you talk about us
spending less, that is really important. And I would say also
investing less. Because there is a return on investment for
what we are talking about here both in the economic impact it
has in our country and, of course, on the strategic importance
that it maintains over our adversaries.
I am nearly out of time, but I think I do want to point out
that innovation, that investment in innovation is paramount to
our success as a nation. And the SBIR and STTR programs are
core to that American innovation.
Mr. Chairman, I yield back.
Chairman WILLIAMS. Gentleman yields back.
And I now recognize Mr. Alford from the great State of
Missouri for 5 minutes.
Mr. ALFORD. Thank you, Mr. Chair.
Thank you, Ranking Member Velazquez, for holding this
important hearing today, and thank you all for being here on
your own time and own dime. I appreciate you coming in.
Today's hearing is focused on the SBIR and STTR programs,
two of the most important public-private partnership programs
Congress authorizes. These programs help small businesses
access capital, a vital issue that constrains growth.
Additionally, these programs spur innovations. And American
ingenuity is why our nation laps the world in new technologies,
and these programs are a key pillar in supporting small
businesses that create new products.
While these programs are important to American innovation,
the Chinese Communist Party also finds it important for their
great innovation, stealing the intellectual property of
Americans. According to a 2021 DOD study on SBIR programs,
nearly all cases show that Communist China, not the U.S., is
the ultimate beneficiary of DOD and other U.S. Government
research investments. With both SBIR and STTR's authorizations
expiring in September this year, I look forward to working with
my colleagues to make sure these programs remain pillars of
innovation.
I want to start with you, Cyrus. Thanks for being here, and
thank you for letting us call you Cyrus.
What safeguards should this Committee consider when
reauthorizing this? I know you all have said it needs to be a
permanent reauthorization to make sure that the influence, the
espionage, and theft of intellectual property from the CCP is
reduced or, if we could eliminate it, would be great.
Mr. MIRYEKTA. We have already, just by Air Force and Space
Force's actions alone, have changed the American innovation
landscape. They realize that if they have CCP capital even
affiliated, they will be prohibited from doing work with the
Department until it is sanitized.
The other branches of service and every agency that gives
or awards SBIRs and STTRs should have a FOCI, or Foreign
Ownership, Control, and Influence, due diligence team that is
as effective as what the Air Force has. Most agencies haven't
even started building a team, and there are only really four
and a half functional teams being generous for who is actually
doing the vetting.
Once the innovators realize this is a real hurdle to
reaching U.S. Government funding, they will act immediately
before they go to bed that night. Once they realize this is
reality, they will change on a dime. Innovators know how to
pivot, and they have to accept it as reality.
The SBIR STTR Extension Act has done that. NDAA-23 has done
that. The Committee on the Chinese Communist Party has done
that. And they have made it real for our innovation industry.
One of the issues, though, with the due diligence teams is they
are required, but no resources are provided. That is like
asking the agency to give me everybody who doesn't have
something real going on. And so this is a low-priority mission.
Mr. ALFORD. Well, I am also honored to be on the
Appropriations Committee. I am not on Defense. But I do know
that this is important, and this investment, if you are talking
about resources, to fund these programs, are they going to root
out this--these things are actually hurting America, hurting
our innovation, and threatening our national security. So I
will be having a talk with the Chair of Defense Approps, Mr.
Calvert, about this and seeing what direction we could head
right across the hall here.
I want to talk with you a little bit more, Cyrus, about
China, its influence in our universities. The University of
Missouri-Kansas City was just in my office this week. They are
trying to create a defense corridor. They have a SCIF even
built on campus. They are working with drone programs, critical
mineral processing, trying to make the Kansas City area and
down into my district really a defense corridor.
How should universities be looking now? Because the Chinese
students are here. How do they get here in the first place, and
then what safeguards should we put in place to make sure that
espionage is not taking place?
Mr. MIRYEKTA. The Chinese Student Scholar Associations are
run out of the Chinese consulates all over the United States.
When Chinese students used to come to America in the '90s
and early 2000s, they would integrate with the U.S. population.
They would have boyfriends and girlfriends who are American.
They would fall in love with America, and they would go home
with pro-American sentiments.
Nowadays, Chinese students are kept in these little thought
ghettos managed by the Chinese Student Scholar Associations.
They are given weekend activities where they are indoctrinated.
It is not far from Iran's Basij and how they do grassroots
indoctrination. And we train them with the latest education,
and then we send them home no more American than when they
arrived.
Mr. ALFORD. And they are members of families that have
favorable status with the CCP, if not CCP members outright,
correct?
Mr. MIRYEKTA. They have to be in good standing to come
here, sir.
Mr. ALFORD. Yes. Just a point of clarification, Whiteman
Air Force Base, home of the B-2 stealth bomber, home of the B-
21 soon, the Raider, is 10.8 miles from the University of
Central Missouri. They have a small number, five to six Chinese
students. They say it is not a threat. But we have to be
vigilant and aware without damaging the reputation of innocent
people here to gain education.
Thank you, and I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Cisneros from the great State of
California for 5 minutes.
Mr. CISNEROS. Thank you, Mr. Chairman.
And thank you to all the witnesses for being here today.
I am going to get right to the questions. Mr. Glover,
Politico reported that 20 percent of the SBA workforce will be
cut by Mr. Musk and DOGE, and who knows what other cuts as far
as financial may come along that way as well.
Does threatening firing and forcing resignations of
dedicated civil servants at the SBA and cutting their budget--
or at any agency that administers SBIR or STTR, programs help
small businesses, and how does it hurt the programs overall?
Mr. GLOVER. I had the privilege of working with Vice
President Gore's reinventing government initiative in the
Clinton administration. They cut 300,000 jobs, but they did it
very carefully, and they looked at it very meticulously and
took several years to do it, and they did bring down the--you
know, the expenditures. They did it carefully and wisely. We
didn't hear screams or shouts from the employees being unfair.
Terminating people with virtually no notice, not allowing
them to plan, run their future is a challenge. We see cuts
that--without thinking about it. When you cut R&D budgets, you
are going to end up getting less innovation; you are going to
end up--the inventors are going to look somewhere else for
money.
And, as I have been told, they will look wherever they
have. They have spent their whole life developing this
technology. If they can't get the money in the United States,
they will get it somewhere else.
So it is a real challenge. It is a real problem. And it
should be done carefully and precisely.
Mr. CISNEROS. Along that line as well, there is a company
and small business that is doing some very innovative stuff
around solar panels and making them more efficient. But the
amounts that we are paying here--I believe it is like 50,000,
phase 1; 250,000, phase 2; and then 750,000 later on--it is
just over a million dollars. They haven't really sought any of
this funding to help them along the way because it is just not
really sufficient enough, and they have had to get outside
funding in order to help them and to do the innovation that
they need to.
So are these programs suited right? Are the amounts that we
are paying right now, are they sufficient enough? Is there
things that we need to look at to increase things to help them
innovate technology and keep out the----
Mr. GLOVER. First of all, the amounts are 100- to 250,000.
Some agencies have gone below that, like the Air Force. But
everybody else is pretty much at 100 to 250. And the follow-on
funding can go up to $3 million if you do things right and even
higher than that with SBA-specific approval.
We look at the balance of the situation of how do we fund--
do we give more at phase 1s and early on awards and less phase
2s? And what we have had is the National Academy of Sciences
looking at this program, and they have looked at it to balance
that. And they say we have got the balance about right. That
was 4 years ago. We haven't looked at it recently, but there is
some flexibility.
So the agencies can go up or even down if they choose to.
But, by and large, it is--if we can get phase 3 working right,
like GSA did, we added $2 billion of phased--just because you
change the procedure of how you did contracting. They have got
an even better program on the shelf. We can make that huge
difference in how that works.
Mr. CISNEROS. All right. Thank you.
Ms. Mackey, Congress gave the United States Special
Operations Command, SOCOM, a special authority in 2021 to do
business-to-business transactions, and in fiscal year 2023
their average time to production, decision from the initial
topic enhancement to the award that follows as in phase 3,
developed from 5 years to 18 months.
Now, while SOCOM's approach can't be used for all SBIR
programs, how can we support agencies in moving innovations
through this process faster than the current average timeline?
Ms. MACKEY. That is a great example. I love what SOCOM did
with that. And I think that, when we look at this, we need to
understand it is not the small business innovator; it is not
the high-tech company that is slowing things down. It is the
processes that we have in place.
I think a first step would be to approximate some of what
we did with SOCOM as a pilot program within the other SBIR
programs. But it is not just within the SBIR program. And this
is the point that I think is important for us to think with. It
is within that R&D world that funds it, but it is also within
the acquisition world that acquires that does the follow-on
testing.
So I think if we were to encourage pilots of two groups
working together more effectively, the way SOCOM has the
ability to bundle that together, you have an ability to get
something over the valley of death because there is someone to
receive it on the other side and also to sort of build that
bridge for you as you come over.
Mr. CISNEROS. All right. I yield back. Thank you.
Chairman WILLIAMS. Gentleman yields back.
I now recognize Mr. Meuser from the great State of
Pennsylvania for 5 minutes.
Mr. MEUSER. Thank you very much, Mr. Chairman.
And thank you to our witnesses. This is a very informative
and important hearing. Appreciate it very much, you being here.
So, Dr. Marinelli, you discussed your company's development
of technology to extract rare earth minerals, critical
components for satellites, data centers, and other
technologies, super important from coal ash piles--love that.
We got a little bit of coal ash up in my--my district, to say
the least. We are working on it in this same manner.
So the SBIR program has assisted you in developing this
technology, and maybe you can expand on why you believe a--how
it has helped you.
Mr. MARINELLI. So this started out as a little idea
experiment. We started as a kind of beaker-scale laboratory-
type experiment to see if we could extract rare earths from
coal ash. It turns out that technology is based on the same
process that you use to extract uranium and plutonium, was
developed during the Second World War. We adapted it to this
purpose.
We received SBIR funding then to bring it to a larger scale
and to work through some of the details of it and finally went
to DOE and DOD's IBAS program, where we were able to get
funding to build a pilot plant actually at Winner Water systems
in Sharon, Pennsylvania.
Mr. MEUSER. In Sharon. Okay. Great.
Mr. MARINELLI. Yeah, in Sharon.
Mr. MEUSER. Did they find you, or did you find them?
Mr. MARINELLI. We went out and found them, but--and we
worked very closely with both DOD and DOE in that process.
Mr. MEUSER. The first time is easiest, right, because once
you are in, once you have contact, it is far easier; getting
through is the most difficult part?
Mr. MARINELLI. Certainly. But you have got to also show
success.
Mr. MEUSER. Just like with anything.
Mr. MARINELLI. Yes. And then it turns out that Appalachian
coal is actually rich in rare earths, is one of the things that
we learned. And, working with Senator Shelby before he retired,
we were able to get an appropriation to build the next scale
plant down in Alabama.
Mr. MEUSER. Okay. Good. Well, contact me. We have got
Schuylkill County, and we got the best anthracite, and we have
got all these rare earths within our ash, so--within our coal
banks.
Mr. MARINELLI. We are certainly willing to move forward----
Mr. MEUSER.--those that we are working on excavating.
Thanks.
Mr. MARINELLI. Sure.
Mr. MEUSER. Mr. Miryekta, first off, thank you for your
service, sir. Appreciate you very much.
So, from your experience, your methods, your discussions on
China, very serious, collecting sensitive IP from SBIR-funded
small businesses. Now, this sounds like it is rampant. It
sounds like it is targeted; sounds like they are targeting SBIR
potential businesses or the SBIR fund.
Now, it is $100 million, right? That is a lot of money, but
that is not enough to create a whole espionage ring. Is their
main point not just accessing the money but also accessing the
mothership, if you will, that is doing the contracting?
Mr. MIRYEKTA. So, to my knowledge, no. To my knowledge,
they are very focused on the innovators. It is not the amount
of money. Everybody is seeking SBIR-funded companies, U.S.
investors, Chinese investors.
The receipt of a SBIR tells the investor that there is a
differentiator, whatever it is. It doesn't matter if they like
the program or not, but this is a company that somebody in the
government vetted. They believe it will be effective. So it
attracts both good and bad investment. But that is for the
technology itself. And we will see a lot of early-stage funding
where a CCP investor will try to get in at the pre-seed stage,
disseminate their cash across the board so they can find or
keep an eye on most of the industry. And then you see what
rises up, and that is what they will focus on.
Mr. MEUSER. Okay. We had Reauthorization 2023. Maybe you
could talk about some of the improvements.
Did you like what was done, particularly from a foreign
adversary security standpoint or just from an access
standpoint, as well as it being better known by those who may
benefit by this program?
Mr. MIRYEKTA. This was a watershed event, sir, and thank
you for asking about it.
It legitimized the mission for keeping CCP investment out
of our equities. It became real once it was codified. And,
because we had two laws or another law and an executive order
on top of it, in--and it takes about 2 years for the industry
to accept it. But, as of February of 2024, they weren't certain
if this was a real requirement--the denials became more
publicized over the summer.
By December of 2024, they accepted it as reality and our
innovators are trying to get in front of it and make sure that
they self-sanitize.
Mr. MEUSER. Thank you very much. I yield back, Mr.
Chairman. Thank you all.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Tran from the great State of California
for 5 minutes.
Mr. TRAN. Thank you, Mr. Chairman.
Thank you, Ranking Member.
Thank you and welcome to D.C. to our witnesses.
Mr. Glover, in your testimony, you rightly pointed out that
America's basic science is a primary national strength, but
converting that science to American innovation and jobs faces
increasing international competition. Unfortunately, small
businesses in SBIR/STTR programs face the threat of the Chinese
Communist Party stealing their intellectual property and
claiming these technology--technological innovations for
themselves.
What role does SBIR/STTR program play in the American
innovation ecosystem, and how does the SBIR/STTR program
protect American innovation from issues like foreign ownership
and patent theft?
Mr. GLOVER. Well, we started off when the founders created
the SBIR program, we wanted to avoid having foreign countries
benefit from this. So we put requirements in the law that said
it has to be a U.S. company; it has to be owned by U.S.
citizens 51 percent; and the work has to be done in America.
Well, we thought we did enough. Well, we did for probably
30 years. But the last few years, obviously, the Chinese have
outsmarted us and gone beyond that. So it is--it is a
challenge.
But, again, you have got to be careful not to simply say
``no'' when anything comes up with, and I think as Cyrus
talked--you need to be able to fix the problems. And we found
some of the agencies do not tell the company what the problem
is, nor do they give it a chance to fix it.
The Department of Defense in their Under Secretary's memo
made it very clear that you have to tell them what the problem
is and give them a chance to fix it. And, unless you give them
a chance to fix it, you are just shutting people down, and they
can never learn; they can never get better.
So small business develops the technology. Study after
study shows it--shows how great the SBIR program is at
developing it. We have got to make sure that we do stop the
foreign use of it. It is not as common, but the problem is it
is in critical areas.
So like 99.9 percent of all SBIRs are just fine. But that
one-tenth of 1 percent may be giving away whole generations of
new technology--critical next generation of something
significant. So it is a real challenge.
Mr. TRAN. Thank you for sharing that.
Ms. Mackey, DOD accounts for roughly half of the SBIR
funding across the federal government, but concerns have been
raised that the application process is daunting for many new
businesses working to break into the space.
In your experience, is DOD doing anything to make this
process easier for first-time applicants?
Ms. MACKEY. I have seen a tremendous uptick in outreach
efforts for first-time applicants. I will tell you, when we
wrote our first proposal 20 years ago, it was a lot easier to
write that first proposal. It was a lot easier to get started
than it is now.
I think we really need to focus on, have we overregulated
that very first piece? All these issues notwithstanding, we
need--we need to make a funnel that can attract new entrants
into it.
So I am seeing better outreach, and I think there is plenty
of work we could still do.
Mr. TRAN. Thank you.
Mr. Glover, back to you real quick. The due diligence
program to assess foreign risks has been successful in
identifying risks already, but it can add another layer to an
already complicated application process.
I am a big proponent of streamlining the SBIR and STTR
programs while still protecting our research from foreign
threats, such as CCP, so entrepreneurs can focus on building
new technologies and creating good-paying jobs.
What changes can we make to enhance its effectiveness
without creating an overly burdensome process for small
businesses, particularly new applicants?
Mr. GLOVER. As someone who still remembers the Paperwork
Reduction Act, which was a big deal years ago and sort of been
ignored in recent history, it is a real challenge, and the
first thing, I think, would be--is quick and easy. Make model
contracts and force every agency to say, ``When you get an
award, here is your contract.'' There is no reason they can't
do that right now. So that would simplify phase 1. It would
take months out of the cycle. Same thing for phase 2; same
thing for phase 3.
They do it with grants, but they don't do it with
contracts. GSA proved that, if you give a simple contract, you
do it--they cut years out of the contracting process for phase
3s. And they got a program to do even more that hopefully gets
finalized very soon.
But you come up with some basic ideas, but task the
agencies to say, tell us why--there is a provision in the law
that says report and standardization, simplification. DOD just
ignored it. Put some teeth in that and make them do it, but
force the agencies to come up with the solutions.
I can give you simple standard contracts with the award;
that one saves time, energy, and effort. The proposal issue,
that is a challenge because you have to somehow tell people
what you want.
Mr. TRAN. Thank you, Mr. Glover. I truly appreciate it.
I yield back, Chairman.
Chairman WILLIAMS. Gentleman yields back.
I now recognize Mr. Downing from the great State of Montana
for 5 minutes.
Mr. DOWNING. Thank you, Mr. Chairman, and thank you all for
your testimony today.
First of all, I am deeply concerned by China's ongoing
efforts to exploit the SBIR and the STTR programs to steal
valuable U.S. intellectual property, and we need to protect
these programs from subversion from our foreign adversaries.
I am going to start out, Mr. Miryekta, thank you for being
here today. China weaponizes talent recruitment programs like
the Thousand Talents Plan to gain access to deeply sensitive
information from American companies and research institutions.
First, can you give us an idea in your estimation of how
effective these talent recruitment programs have been and
really how far they have advanced China's technological
capacity compared to ours?
Mr. MIRYEKTA. Yeah. I have seen--thank you for your
question, Congressman.
I have seen an individual that fled the PRC for having an
active role during the Tiananmen Square Massacre on June 4,
1989. Fast forward 30 years, the United Front Work Department
has won him over, and now, despite the success he found in
America, he is helping the Chinese Communist Party from the
United States. They are highly effective at recruiting expats
on U.S. soil and in Europe.
Mr. DOWNING. So what types of technologies has China's
talent programs and IP theft efforts specifically targeted?
Mr. MIRYEKTA. It is literally the same as the Air Force/
Space Force requirements. It is--you know, new space
capabilities, new energy capabilities, AI, autonomy, everything
that we have as a priority is essentially seems to be mirrored
by their priorities.
Mr. DOWNING. Do you believe that SBIR and STTR currently
have the protocols in place needed for mitigating the impact of
China's talent recruitment strategy?
Mr. MIRYEKTA. Only Department of the Air Force. They are
the only ones capable.
Mr. DOWNING. Thank you. Thank you for those answers.
I also want to discuss with you the impact of China's
rapidly developing AI capabilities and the threat that it poses
on our research security. We have, obviously, seen some pretty
interesting things recently.
To what degree have China's advancements in AI development
bolstered their ability to subvert U.S. research programs,
including SBIR?
Mr. MIRYEKTA. When it comes to the Chinese, they spend
billions on perception management, and they are constantly
overselling their capability. However, oftentimes,
international actors become sympathetic to what the Chinese are
broadcasting. That doesn't mean that their AI is on par or that
it is actually legitimate with the story that they have given
us.
Mr. DOWNING. Well, thank you very much.
Clearly, we need to do more to protect the integrity of our
federally funded research programs. And, as the Small Business
Committee develops the reauthorization of SBIR and STTR, I look
forward to making research security a top priority for this
legislation.
And so I thank you, and I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Ms. Scholten from the great State of
Michigan for 5 minutes.
Ms. SCHOLTEN. Thank you, Mr. Chairman. And thank you--
excuse me--as I fend off the last bit of this winter cold.
Thank you so much for our witnesses for joining us here today
for this incredibly important conversation.
The SBIR program has been truly instrumental in supporting
small businesses that drive technological innovation. I wanted
to read just a little bit about the economic impact here
because that is essentially what we are talking about, right?
How--what is the value of the dollars that we are investing
in this critical program? Economic analysis of the program has
routinely demonstrated its outsized importance in generating
innovations and economic growth. Between 1996 and 2020, 99 new
drug approvals, 12 percent of all new drugs approved, were
developed by SBIR/STTR firms.
Another study found the SBIR phase 2 awards show return on
investments between $22 and $33 for every dollar invested. It
is incredible.
A study from the National Cancer Institute found that, for
every dollar invested, it resulted in $11 in commercial sales.
Throughout its lifetime, 829 SBI firms have gone public, and
2,120 have been acquired.
Finally, 10 percent of all venture capital investments go
to SBIR firms. I like those numbers.
Mr. Glover, the SBIR program is a game changer and critical
for our economy. How can we ensure that this program continues
to support cutting-edge research and development, especially in
areas that are critical for U.S. competitiveness, such as
health and national security?
Mr. GLOVER. One, I think we simply need to reauthorize it,
make it permanent, put the consistency into the program. Two, I
think we need to have the program simplified and streamlined,
and I think the government--GSA proved it can be done. So make
the other agencies do it, something you can require in
legislation and monitor and make sure that happens.
And I think, quite frankly, the program needs to be a lot
larger. Something this efficient is still at the 3 percent,
hasn't been increased since 2011. You know, you should reward
something that works, and we haven't in, what, 13 years, 14
years.
Ms. SCHOLTEN. And I don't see us going in that direction
right now. In fact, we have recently heard--staff recently
heard from an SBIR recipient, who was unable to access funding
during the federal funding freeze enacted by Donald Trump and
Elon Musk several weeks ago. Luckily, due to a court order,
court intervention--right?--the administration wanted to stop
it, but we needed the judicial branch to step in--NSF reopened
their funding portal.
Can you explain how this type of uncertainty impacts SBIR
recipients?
Mr. GLOVER. The one--the thing small business needs most is
cash, and they need money, and they go out of business when
they don't have it. And they don't have--they often mortgage
their house to make their technology work. So, when you shut
off the spigot, you basically say, ``This technology will
die,'' or it will get funded by somebody else. And we all
know--have heard today how much China is out there looking for
it. And that is only--outside of the SBIR program, it was
rampant. This is by no means the only place the Chinese are
looking.
So it is critical, and it is painful to let somebody spend
their whole life developing technology, get it to a level, and
then they win. And then say, ``Oops, sorry, we are not doing it
today, and we don't know when we are doing it.''
Ms. SCHOLTEN. Doesn't seem like the chainsaw approach is
working as intended in this particular context. National
security depends on us being a little bit more precise here.
One more thing, Mr. Glover. The tax cuts passed in Trump's
first term actually increased taxes on research and
development, making companies amortize their research
expenditures over 5 years rather than all at once.
Do you have any thoughts on how that has impacted SBIR
firms who usually have no other form of income?
Mr. GLOVER. It either has bankrupt them or put an end to a
bankrupt in effect state, where they may not file bankruptcy,
but they don't have any money to pay anything and don't have
money to continue. When you are faced with getting a million
dollar grant and you got to pay taxes on a million dollars, but
you only--used to be, you know, it was 20 percent. Now it is
100 percent.
We are having a conference with a bunch of people on
tomorrow afternoon with companies all over the country. It has
been a horrible situation.
I was told when it got passed, ``Oh, don't worry; it is so
important; there is no way it won't get extended.'' Well, guess
what? Washington is Washington. Hasn't been extended.
Ms. SCHOLTEN. Thank you. Thank you so much, sir. I really
appreciate it. As a champion of fiscal responsibility, these
programs are critical.
I yield back.
Chairman WILLIAMS. The lady yields back.
I now recognize Mr. Finstad from the great State of
Minnesota for 5 minutes.
Mr. FINSTAD. Thank you, Chairman Williams, and thank you
for holding this important hearing today, and thank you to our
witnesses for being here with us.
The district I have the honor to represent in southern
Minnesota is home to several innovative companies that provide
cutting-edge products for the Department of Defense. I also
serve on the House Armed Services Committee and am happy to be
serving here on the Small Business Committee as well.
I have had the pleasure and the opportunity of touring many
of these businesses in my district and seen the incredible work
that they have done and that they are doing with the funding
they receive from the SBIR and the STTR programs. So I am
looking forward to the opportunity to work with my colleagues
here on this Committee and our expert witnesses to improve
these important programs that help drive innovation and
economic development across our nation and my district.
So, Dr. Marinelli, as somebody who has had great success
utilizing the SBIR program with the Department of Defense,
maybe just a simple question--and you have touched on it a
little bit, but just maybe kind of cut through the chase here.
So what challenges do SBIR applicants face in the process,
and what changes can we make to expand access for this program
for entrepreneurs and small businesses across the country?
Mr. MARINELLI. So, typically, in the SBIR program, you are
looking at the companies trying to do technology push often in
concert with the S&T program managers and the federal
government. And you have got on the other side acquisition
pull, people working off requirements.
And I think probably the most important thing to do is to
get them working in closer concert, so there is a technology
handoff there. You have really got to derisk the technology to
the point where someone who has got, you know, a billion dollar
technology platform is willing to accept the risk of bringing
that new technology in. That takes money, and it takes time.
So I think trying to make that match earlier in the program
will help both the acquisition programs and make the companies
themselves be more successful and perhaps attract that
investment.
Mr. FINSTAD. Well, as we work as a Committee on the Armed
Services to really strengthen our defense industrial base, it
is now more important than ever that we make this process
easier and more of an A to B than an A to B to C to D and throw
in a couple pipe wrenches in the process and a stable full of
lawyers. So I appreciate your--your advice there.
Mr. MARINELLI. Thank you.
Mr. FINSTAD. Ms. Mackey, as past Chair of the National
Small Business Association, how difficult--again, maybe kind of
cutting to the chase.
How difficult is it for small business owners to understand
the government's hoops and pipe wrenches and all of it that
they have to go through in contracting and the SBIR--with the
SBIR opportunities? How can we make it easier for these
businesses to pursue these opportunities?
Ms. MACKEY. Boy, I can't emphasize enough what it was like
the first time when we won an SBIR and someone came in to
explain how the federal government works. You know, I am an
electrical engineering. My partner is a Harvard Business School
grad. We have some gray matter that--and we were just like,
``What is this system? How does it work?'' And every time you
think you learn more, there is something more to learn.
So here is what I will tell you from our experience that I
think would be helpful to others: When we were able to get
technology through, it was because of an extended team. I mean,
the small business has to be good. The technology has to be
good. But you have to have government counterparts that are, as
Bill pointed out, willing to take the risk.
We, as an ecosystem, need to celebrate those government
counterparts that are willing to take the risk. And it is the
acquisition folks, and it is the test folks. We also had
industry partners who are willing to help us understand, sort
of mentor us; not in a formal mentor/protege relationship, but
in a--so I think what we need to do is celebrate the extended
team, and I think we need to offer them the benefit of the work
that they do to help make that move forward.
I would be happy to think of specific examples, but that is
in general what I think would be good.
Mr. FINSTAD. No. I appreciate that. Your lived experience
through this process is very helpful to hear your story, but
also I want to continue this dialogue as we look at how we can
improve the process and really--you know, again, I come from
a--the Armed Services Committee approach of, how do we
strengthen the defense industrial base, and how do we get some
of these small and mid-sized companies scattered throughout
rural America to have a seat at the table and speak the same
language that government speaks, and how do we make that
easier, not harder.
So thank you for your time and for being here. Mr.
Chairman, thank you. And I yield back.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Mr. Olszewski from the great State of
Maryland for 5 minutes.
Mr. OLSZEWSKI. Thank you, Mr. Chairman.
Thank you to all of our witnesses today for your time and
your testimony.
I think that--just want to reemphasize my colleague,
Representative Scholten, and her point of ROI and why these
programs are so important. So I look forward to working with
Chairman Williams, Ranking Member Velazquez, and all my
colleagues here to prioritize, especially what you all, I
think, have pointed out is providing that certainty, making the
program permanent or at least more permanent in particular in
addition to some other changes. So thank you all for your
recommendations today.
You know, we know these have real-life impacts. I am aware
of at least two businesses in my district that are direct
recipients of this program and SBIR, one of which is a woman-
owned business in Baltimore County. And so I am interested in
also the long-term success, not only of the program but also
the diversification of those who are participating in the
program.
Maybe, perhaps Mr. Marinelli, could you speak to us a
little bit about enhancing the geographic and demographic
diversity of the program? What can we do to bring in new
applicants? What is the most effective way in your mind to meet
that goal?
Mr. MARINELLI. So, if you go back and look at the--there
was a 2014 National Academy study of the Department of Defense
SBIR program, and it showed that some of the underserved States
in the program have some of the lowest per capita submission
rates of proposals in the country. And I think probably the
most important thing to do in terms of diversifying
participation is to get them introduced into the program, make
it easier for them to get in.
In some cases, we have seen some of the States that have
programs that helped bring the program to small companies are
doing much better. Most of the new companies tend to form
around universities, and I think focusing on universities,
regardless of where they are, is important in terms of kind of
bringing them out and telling them, ``Here is a way for you to
get funding.''
Under the STTR program, we have sent, I believe, around $23
million in funds to universities all over the country
associated with that. And I think that is another way to
introduce them to the program is to show them the benefits of
that funding, and it also helps get the technology out, as well
as start to create that workforce that you get on the defense
side. So I think all of those would be important things to do.
Mr. OLSZEWSKI. That is great. I appreciate that. Anyone
else want to--Ms. Mackey?
Ms. MACKEY. So, when we started in the space, we didn't
know anything about defense or federal. And I had the bonus of
being in Boston, you know, companies like PSI that I could
engage with and start to learn this piece.
What struck me as I worked through this ecosystem and a lot
with the National Small Business Association and with NDI's
small business division, small businesses help each other.
Like, there is this tremendous collegial outreach that I
watched a lot of--what people refer to as the coastal companies
helping other small businesses. And I think if we formalize
that, that would be tremendous.
I also think it is important that we help people that
haven't submitted to understand that they are valuable and that
their experience would be valuable. You don't recognize
yourself as valuable or that you could even access this
program.
Mr. OLSZEWSKI. That is great.
I will yield back with that, Mr. Chairman. Thank you.
Chairman WILLIAMS. Gentleman yields his time back.
I now recognize Ms. Goodlander from the great State of New
Hampshire for 5 minutes.
Ms. GOODLANDER. Thank you, Mr. Chairman. And, really, thank
you to our witnesses for being here today.
Dr. Marinelli, I wanted to begin with you. I am very--
especially happy you are here. You know, New Hampshire is home
to PSI facility, and I wanted to give you the opportunity to
talk a little bit more about the important work that you are
doing in my home State.
Mr. MARINELLI. So we have what we call the molecules to
motors program. We started out with SBIR-funded technology to
create new propellants and new explosive materials and new
components for that. There is only so much you can do in a
laboratory. There are certain safety concerns associated with
that, and we needed to find a place where we could scale up, so
to speak.
We actually identified a location in New Hampshire. I am
not going to talk about where it is because of the kind of
things that we do there. But we have grown that now to a 13-
acre campus where we can both mix large quantities of new
propellants that will extend both the range and lethality of
U.S. weapons system. We are about to invest $3 million in that
facility in order to create all of those special capabilities
associated with that.
In conjunction with that, we are going to invest about $6
million in our Massachusetts facility to start to create some
of the nonexplosive components that we then bring to New
Hampshire. So it is very much a collaborative effort. But it is
also an extremely specialized capability.
We even have some large companies in the area that are
coming to us saying, ``Can we use your facility,'' because it
is so hard to get into some of the government facilities to do
that.
So I think it is important. It is an example of a
specialized capability that only the government can fund, and
we are happy to be bringing that to the area.
Ms. GOODLANDER. Well, thank you for that. You know, the
University of New Hampshire is home to the FOSTER program where
the FOcused SBIR/STTR Teaching Entrepreneurship and Results
Program, you know, which has the basic mission of helping to
guide small businesses through the SBIR and STTR processes.
I would like to just ask our witnesses to speak a little
bit more about how these types of university-based programs
have been force multipliers and really helped the SBIR and STTR
programs. Maybe starting with you, Mr. Glover.
Mr. GLOVER. The vast programs and regional outreach
programs primarily with universities and small business
development centers in many of the States, they have done an
excellent job. But it is a challenge because, quite frankly,
they don't have the culture in there. And you will often find
that SBIR is the only real opportunity for a company in certain
areas--certain rural areas have not States that are not on the
coast, and it is a real challenge.
And we have seen them be successful and really do a great
job. But getting people to write proposals is a critical issue
because you can't win if you don't submit a proposal. And the
studies show that there is a direct relationship with the
number of proposals submitted by a State and the number of
awards they win.
Ms. MACKEY. So I work a lot with the University of
Massachusetts at Lowell and their outreach similar to the UNH
outreach. And what I find really valuable there for SBIR
companies is not only the FOSTER type of programs to teach you
how to write a proposal, but the depth of research and the
infrastructure that you can access to do different research
pieces.
The other thing that I really like about what the U-Mass
system, what they are doing with their advanced research
centers, they are partnering with the industry. So it is not
just how do you get started, how do you do the research, but if
I were to use a golf analogy--my husband would be so happy I am
doing this--it is the swing through. Right? It is where do
you--well, I guess I can't take that golf analogy any further.
I tried. But it is the swing through, right?
And so I think it is universities. And to Jere's point,
partnering also with industry for that business model kind of
understanding.
Ms. GOODLANDER. Dr. Marinelli, did you want to add
anything?
Mr. MARINELLI. I mean, I think one of the key things that
we see is a lot of our new technology that we bring into our
company actually starts with the universities. More often than
not, the way we bring technology out of the universities is to
actually hire the students, and then kind of the professors
come along for the ride. So I think it is very critical.
Some of our UUV programs, we actually do with the
University of New Hampshire off the pier there. We are working
with one of the chemistry professors at UNH on our energetics
programs. Universities are critical here, and we need to
maintain their strength throughout this activity. They are
critical to the future workforce of the country.
Ms. GOODLANDER. Well, I appreciate that, and I am going to
be fighting really hard for the critical funding and the
certainty that we need for our small businesses and for our
universities.
You mentioned the Paperwork Reduction Act. I just want to
invite all of our witnesses today, any ideas you have about how
to simplify and streamline these processes, including the use
for SBIR of other transitional authority, really welcome all of
your ideas because this is going to be critical to these
programs, really, continuing to leverage the taxpayer dollars
that they do in extraordinary ways. So thank you.
I yield back, Mr. Chairman.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Ms. Simon from the great State of
California for her 5 minutes.
Ms. SIMON. Chair Williams, I love it when you say the great
State because I will remind you again, it really is. It is a
lot warmer than D.C., sir, in my 8 weeks.
I want to thank you all for coming today, and I just really
had a great time reading the materials and your testimony prior
to this hearing. I, like I believe everyone on this Committee,
wants the United States to be first in innovation. There is no
doubt about that.
Some of you may have heard, because I keep talking about
the amazing CRISPR lab at the University of California. I
visited last week and saw all these amazing students, met our
Nobel prize-winning professor and physician scientist at that
lab. They have proven--they have cured sickle cell anemia in
one woman who will no longer have to spend nights away from her
children, spending tens of thousands of dollars, every
emergency room visit.
They are light speed ahead on finding treatments for ALS
and really working with dementia patients to make their quality
of life better. This amazing lab with these brilliant young
students, really new lab technology; it was sparkling.
And I think about Exelixis and Science Corp., Alameda
County is an innovation hub where some of the most, I will say,
brilliant folks in the world who, yes, are from the United
States, and some folks who have come across the world to study
in our beautiful facilities to change the lives of folks. I
know this to be true.
I have told my story, and I will tell it every single day
as a widow of a great man who died of cancer who was in a
clinical trial. Our lives will forever be changed because we
got a little bit of extra time because of great scientists who
dedicated their lives to both the public sector and the private
sector.
I have a question, and it might be a comment. I am super
concerned that, in this moment, maybe even right now, there are
folks who are being fired from the SBA. There are folks who are
being fired from DOE and our Department of Health.
How the hell are we going to facilitate more opportunity
for innovators and researchers and folks who will literally
change the world, be it in 10 years--they have an idea right
now. And, if it is difficult in this moment to access small
business innovation research grants and resources and small
business technology transfer resources, if it is difficult now
before the slashing and burning of staff in these critical
departments who serve our innovators and small businesses--we
are talking about continuing resources for these folks. Well,
guess what? If nobody answers the phone or no one is answering
the inquiry on the website, our folks are going to be left--
they are going to be left dry.
And, as a result--as a result of what is happening
throughout the administration, we know if you talk to physician
scientists, if you talk to innovators, if you talk to that
young 26-year-old who is working at Genentech working on a data
model that I couldn't even fathom how complicated it was seeing
it on a screen, who is this close to that thing, what is going
to happen? Children are going to die.
There is actually a family walking around the halls right
now, there is a young child who has a very rare disease, very
rare disease. I am hoping to meet them today. The baby is about
3 years old. Waiting for that next thing.
No one is answering the phone. No one is reading the
applications. I cannot trust an AI algorithm to read an
application that literally has the propensity and the
opportunity to save a generation. We got to do better.
I guess, you know, sir, I love all of your bios, so
inspired by your work; thank you for your service. I can just
pick and choose. Maybe, Mr. Glover, and thank you so much for
coming.
What is going to be--what are the adverse effects of having
low staffing as, again, we are trying to push and we are
talking about re-establishing resources for our innovators, our
scientists, for our pharmaceutical geniuses who are changing
the way that, for instance, the elderly live out their last
years and months. If these folks can't get in touch with folks
or there is decreased infrastructure, what happens?
Mr. GLOVER. I don't know. And, you know, we hope things
always get better. We are optimistic, and we hope things get
better, but I don't have an answer for you.
Ms. SIMON. Yeah. Well, I appreciate all of you here and the
work that you are doing.
And I yield back. Thank you so much for being here, and I
look forward to working with you all as we move forward and try
to figure this thing out for our people. Thank you.
I yield back.
Chairman WILLIAMS. The gentlelady yields back.
I now recognize Mr. Jack from the great State of Georgia
for 5 minutes.
Mr. JACK. Well, thank you, Mr. Chairman, and thank you to
each witness for being here today.
Innovation has long been the driving force behind America's
global leadership, whether in technology, medicine, or defense.
Yet, in an era of rapidly advancing technologies and increasing
global competition, we must continue to foster an environment
where American businesses, particularly small businesses,
across each and every one of our congressional districts can
thrive.
Thanks to the Chairman. I serve as the Chairman of the
Subcommittee on Innovation, Entrepreneurship, and Workforce,
and I look forward to working with each and every one of you
going forward to help strengthen the environment in which our
small businesses can thrive.
But I would like to first start with Dr. Marinelli, if I
could. I know you have had an opportunity a few times here
today to talk about a few suggestions. But, specifically, the
administrative complexity of applying to SBIR and STTR programs
favors those, in my opinion, with strong networks or prior
participants.
In your testimony, you highlighted some great opportunities
for the programs to increase participation, and if you could
just take a moment yet again to reiterate your suggestions and
reducing the barriers to competing for these programs.
Mr. MARINELLI. So I think, as ML spoke, you know, I--my
career started with the program 40 years ago, and it was a much
simpler process then. The solicitations were simpler. The
proposal formats were fairly common. Today--I don't handle
these directly anymore, but it is bewildering to look at the
different types of solicitations, the different formats you
need to respond to.
We get messaging all the time about changes in the
solicitations that make it difficult for our staff to
understand. And we are a very experienced firm. It makes it
difficult for us to understand sometimes how to respond to some
of these solicitations. I can't imagine what it is like right
now for a small company coming in.
We have unbelievable IT requirements on ourselves these
days. We get a lot of attention to that. I can't imagine a
small firm being able to do many of the certifications anymore
that would be required to continue on in the program very long.
So I think there does need to be some recognition that
there are people who aren't like us, who don't have that
experience, and kind of a toned-down version of the application
process that would enable them to put their ideas forward. I
think that is probably very important.
Mr. JACK. Wonderful. Thank you.
And, to Cyrus, because, as you noted, we are not going to
pronounce your last name, after the initial application, my
understanding is that small businesses need more support in
transitioning through the multiple phases of the application
process. And a common trend we are seeing of China's success in
stealing American technology comes from closing the funding gap
and directly supporting the scale-up through small business
investment.
Given the challenges of private sector investment and long-
term technology development within the U.S., how can SBIR be
modified to help small businesses, small manufacturers better
overcome the capital crunch between phase 2 and 3?
Mr. MIRYEKTA. If there is an increase in the dollar amount,
I know a lot of innovators will not even bother applying for
SBIRs because they believe the dollar amount is too low. I
think, if it was moved up probably to 2 million, you would get
a lot more buy-in.
And some of the innovators believe that, ``Okay, we will
succeed commercially before we ever come back to the government
and try to sell a service contract,'' because the SBIR process
is too cumbersome for them to apply.
Mr. JACK. Wonderful. I appreciate that.
I am just going to close, Mr. Chairman, by noting something
that I think does impact small business writ large. But we talk
about the regulatory environment, and some of these regulations
that have been foisted upon small businesses in previous
administrations have had a deleterious impact to their ability
to succeed.
And, tomorrow, our House is going to vote on a
Congressional Review Act resolution led by my good friend Gary
Palmer and myself. And it is to repeal a regulation and rule
that would affect a company in my congressional district. It is
about tankless water heaters. I know my colleagues are tired of
me saying it.
But, just to share it with--and I will ask a closing
question. There was a regulation and a rule imposed on the
noncondensing tankless water heater industry, which just so
happens to be completely manufactured in my congressional
district, that we are seeking to repeal tomorrow in our
legislative body.
So, if I can close out with you, ML, it is not germane to
the testimony today, but when it comes to the regulatory
environment, could you just offer 30 seconds about what we, as
a Small Business Committee, can do to help improve the
regulatory environment in which small businesses operate today?
Ms. MACKEY. I think I have a quick, short answer for you. I
would recommend that you speak to the National Small Business
Association. They have a committee that focuses on regulatory
burden on environmental and would be directly related to this.
And I say that because I think the best way you can come up
with making this easier is ask the small businesses, and NSBA
can give you that voice. I think you need to ask across the
board, but I would start with them.
Mr. JACK. Well, I applaud the Chairman for consistently
providing us an opportunity to engage with small businesses and
hear directly from you all. I appreciate that recommendation.
And I thank each and every one of you for taking the time
to come up today to share with us some ideas to better improve
the environment in which you all thrive.
Thank you.
Chairman WILLIAMS. The gentleman yields back.
I now recognize Dr. Kelly Morrison from the great State of
Minnesota for 5 minutes.
Ms. MORRISON. Thank you, Mr. Chair. Thank you for holding
this hearing.
And thank you so much to our witnesses for being here
today. Sorry I am all the way now down on the other end.
It is great to see so much bipartisan consensus about the
important role that SBIR and STTR programs play in supporting
American innovation.
Thanks for taking the time to testify.
Mr. Glover, in your testimony, you mentioned that one of
the strengths of the SBIR and STTR programs is in its
investment and innovation across the country, providing funds
to small businesses in all 50 States.
My own home State of Minnesota has received nearly 3,000
awards since the program began in 1982, ranging from
investments in unmanned ground robotic systems for DOD
surveillance and recognizance to robotic greenhouse gas
monitoring to measure the impacts of climate smart farming
practices, to reducing energy usage, and wearable devices
through sleep science, informed algorithms, demonstrating, I
think, that great ideas and scientific breakthroughs can come
from anywhere.
Mr. Glover, could you elaborate on why it is important for
the SBA to promote innovation across the country? How can we
enhance the geographic and demographic diversity of program
participants? And how would increasing that diversity of
applicants impact the competitiveness of the SBIR and STTR
programs?
Mr. GLOVER. SBA has been reaching out to try to do that,
and they have bus tours where they go to underserved States and
try to get--work with the universities, work with those that do
outreach.
I think that, you know, more needs to be done, and we have
to be careful because, if we allow venture capital to be the
selection criteria, although it is illegal, what we find is
awards--and some of the jumbo awards especially--just going to
a very few States.
So we have got to make sure that we don't let venture
capital be the deciding factor of who wins an award. If they
have, you know, matching money, that was always prohibited
because matching money meant the States in the middle of the
country didn't have anybody to match with. So we have got to be
careful about that and how that selection criteria goes.
We looked at the super jumbo awards, and we found out that,
out of $13 billion of venture capital, some 7 billion before
the awards, 6 billion after, 11 billion of that went to one
State: California.
So we have got to be careful because, obviously, selecting
those companies indirectly meant that it went to primarily one
State, and that was just not a good idea. So we have got to
make sure that we look at that.
We don't want to choose based on anything but merit. Not
geographic because we don't want to get the second best
technology for our warfighters or for healthcare, but we do
need to be sensitive to that issue.
And thank you for the question.
Ms. MORRISON. Thank you for that answer.
In the Army, and DOD in general, female casualties have a
significantly lower survival rate than male casualties.
Architecture Technology, Inc., is an engineering company
headquartered in my district that provides solutions to complex
system problems.
Last year, it was granted an SBIR award to address the
gender survivability gap by developing augmented reality that
provides gender-specific medical training to soldiers.
Ms. Mackey, I appreciate your testimony on how SBIR and
STTR programs have enabled small businesses to work in
coordination with the federal government to provide ingenuity
and advancements in the defense sector.
Could you speak to the SBIR and STTR programs' ability to
address specific challenges or address issues for overlooked
populations, such as women in the military?
Ms. MACKEY. So I think I would answer that in two ways. The
first is, some years ago, the Navy asked me to help them do
some outreach to underserved communities, women and ethnic. And
they said, so, ``We, being a woman CEO, how would we have found
you?'' And I go, ``Well, not the ways you are looking.''
And mostly because I wouldn't have recognized myself where
our skill set is applicable to the DOD. So I am sort of over
generalizing to make a point.
So I helped them figure out how to do outreach outside of
the beltway and to different organizations, but you have to
give examples of how you are meaningful.
The second point I would make is I think it is really
interesting on the geographic diversity to be thoughtful to how
much ingenuity we have in the center of the country.
I work a lot in sustainment capabilities with the
Department of Defense. So figuring out how to make equipment
continue to run, to have longer remaining useful life, to--I
just feel like there is a lot of good ideas that might be on
our farms that those folks wouldn't think of themselves as
technologists.
It might be interesting to consider how do we put the
experienced companies that know how to write SBIR proposals
together with some of the subject-matter expertise to address
maybe there is a program or some thoughtfulness we can do that
really helps share and network that kind of collaboration.
Ms. MORRISON. I love that answer. Thank you.
How do you think permanently authorizing the SBIR and STTR
programs help ensure that small businesses can continue to
bring cost-effective and valuable innovation to the Department
of Defense?
Chairman WILLIAMS. The gentlelady's time is up.
Ms. MORRISON. Thank you, Mr. Chair.
Chairman WILLIAMS. Thank you.
She yields back.
I would like to thank all the witnesses today for being
here, for your testimony, and for appearing and sharing
yourself with us.
Without objection, Members have 5 legislative days to
submit additional materials and written questions from the
witnesses to the Chair, which will be forwarded to the witness.
Now, I will say I hope you see there is some bipartisanship
in this town and in this building, and we are working on a lot
of things together in this Committee.
So I ask the witnesses to please respond promptly.
And, if there is no further business, without objection,
the Committee is adjourned.
[Whereupon, at 12:05 p.m., the Committee was adjourned.]
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