[Congressional Record Volume 168, Number 70 (Thursday, April 28, 2022)]
[Senate]
[Pages S2225-S2226]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SBIR & STTR PROGRAMS
Mr. CARDIN. Mr. President, I rise today to speak about two of the
Federal government's most important innovation programs: the Small
Business Innovation Research program, also known as the SBIR, and the
Small Business Technology Transfer program, or STTR for short.
It is very appropriate we are having this discussion as we are about
to go into conference in regards to legislation that affects America's
competitiveness. The SBIR and the STTR program represent the best of
government industry partnerships.
The programs harness the creativity and ingenuity of America's
entrepreneurs and innovators, solve the most pressing public health and
national security challenges of our time.
The programs are also primed to help our Nation rebuild our domestic
production capacity, to reduce our reliance on foreign supply chains on
critical products, and reduce costs for the American people.
I would like to remind my colleagues that fighting inflation and
rebuilding our domestic manufacturing capacity are inextricably linked.
When factories close, when products sit in shipping containers in
ports, when production capacity decreases due to sick employees, and
when products take longer to get from the warehouse to the store,
prices go up.
I have no doubt that every Senator has heard from businesses in all
sectors of the economy about solving this critical issue.
According to a recent survey the National Federation of Independent
Business conducted, more than half of all small business owners
reported a significant impact due to supply chain disruptions.
Thirty percent reported that the disruptions were causing a
``moderate impact,'' and 14 percent reported a ``mild impact.'' Only 5
percent of those surveyed reported that they were unaffected by the
disruptions. Of the small business owners affected by disruptions, 80
percent reported that the disruptions have caused them to miss out on
business opportunities.
I am very pleased to hear that President Biden announced during his
State of the Union address that rebuilding America's domestic
production capacity is central to his administration's plan to fight
inflation and keep our Nation secure.
SBIR and STTR are two of the best tools in the Federal government's
toolkit to achieve our goal. Congress created the SBIR in 1982 to
increase the participation of small businesses and Federally funded
research and development opportunities in areas ranging from clean
energy to advanced manufacturing.
Under the program, Federal agencies that budget at least $100 million
annually for outside research must allocate a portion--3.2 percent
since fiscal year 2017--to support R&D and small businesses.
There are 11 Federal agencies and departments currently in the
program, including the Department of Defense, Department of Energy,
Department of Education, and Health and Human Services. The program
awards funds in three phases:
Phase 1 awards are worth up to $225,000 and may be used to conduct a
feasibility study to determine an idea's scientific and commercial
promise.
Phase 2 awards up to $1.5 million and may be used to conduct further
R&D on the feasibility of turning an idea into a commercial product.
And phase 3 does not involve an award of funds, but denotes that an
idea is ready to move from the laboratory to the marketplace.
During the commercialization phase, small businesses must raise
funding from the private sector or secure non-SBIR Federal funds.
Congress created the STTR program in 1992. While the program is
similar to the SBIR in structure, utilizing a similar three-phase
progression, the STTR awards go to small businesses engaging in
collaborative R&D with Federal labs, as well as nonprofit educational
and scientific institutions.
The program requires Federal agencies and departments to spend at
least $1 billion on outside research to allocate at least 0.45 percent
of the funds to STTR opportunities.
Most people may not be familiar with SBIR or STTR, but they
definitely recognize the products and companies in the programs that it
helped create. Sonicare Electric toothbrush, iRobot, Lasik eye surgery,
all received SBIR/STTR funding when they were startups. Qualcomm, which
makes computer chips, semiconductors, and other technologies critical
to our national communication infrastructure, also received funding
from these programs. Progeny Systems, a small business based in
Manassas, VA, received more than 300 SBIR and STTR awards to conduct
research over a 20-year period. Progeny's research produced technology
that drastically improves the Navy's torpedo capacity. The company is
now the sole supplier of torpedos to the Navy; and, yes, it is still a
small business.
This is another benefit of these programs: They expand and diversify
the supplier base from which the Federal agencies source goods and
services, increasing competition and investment in high-growth sectors,
which reduce costs over time.
On the manufacturing front, several agencies, including NASA and the
Department of Defense, are currently funding research on advanced
manufacturing techniques, such as 3D printing and glass that can handle
temperatures as high as 900 degrees, which would revolutionize our
ability to monitor nuclear reactors and power plant furnaces to prevent
accidents.
Simply put, SBIR and STTR are invaluable to our national security,
and we should fund these programs adequately to rebuild our domestic
supply chain. Unfortunately, authority for these critical programs
will expire at the end of September unless Congress acts to extend
them.
The House and Senate will go to conference soon on America COMPETES
Act, which includes a 5-year extension of SBIR and STTR. I urge all my
colleagues, especially those who will be conferees, to support this
critical provision.
The junior Senator from Iowa has submitted a motion to instruct
conferees to couple this effort to extend the SBIR program and the STTR
program by 5 years with authorizing language to prevent China and
Russia from acquiring critical national security technology developed
by the program.
I agree with the Senator that the United States needs to safeguard
technologies from being compromised and stolen, and I am pleased that
the House Competes Act bill includes safeguards to prevent our
adversaries from affecting our innovation--not just China and Russia,
but all foreign countries of concern, including Iran and North Korea.
This effort builds off of section 223 of the fiscal year 2021 National
Defense Authorization Act that provides protections and requires
disclosure to guard against foreign influence on Federally funded
research and development.
So I will support the motion the Senator from Iowa will make; but we
must recognize that if we are able to compete with China and Russia,
extending the authorization for SBIR and STTR are critical. I hope she
will work with me to keep this important program from shutting its
doors on September 30.
I would like to add that this issue is very important to my
constituents in
[[Page S2226]]
Maryland. Our State ranks number one in the Nation in R&D spending due
to the presence of Federal and academic research institutions such as
the National Institutes of Health, the National Institute of Standards
and Technology, Johns Hopkins University, and the University of
Maryland.
I have had many discussions with State government officials and
leading scientists in Maryland who have told me that one of the most
sensible steps we can take to improve the SBIR and STTR program were to
make these programs permanent. The research SBIR and STTR funds often
continues for several years before producing a product ready to go to
the market. Researchers need to know that these programs will not
disappear in the middle of years-long research projects.
It is our responsibility to make sure that we act timely so that
there is no lapse in these programs or reduced funding that is
critically needed for these programs' success.
Any such action would be shortsighted and would have a devastating
impact on small businesses engaged in cutting-edge research Nationwide.
Reducing the size of these programs or allowing them to lapse
altogether would hinder our efforts to restore the production of
critical products.
I recently convened a hearing of the Senate Small Business Committee
to examine the impacts of supply chain disruptions on small businesses.
One of our witnesses, Dr. Sridhar Kota, who leads an organization that
advocates for increased public and private sector investment in
America's manufacturing sector, called the SBIR and the STTR ``one of
the really good tools in the toolbox'' and urged the committee to
strengthen the programs to support even more researchers. I could not
agree more.
Instead of leaving the researchers who are inventing the tools that
will power the economy of the future guessing about the SBIR and STTR,
we in Congress have an opportunity--and I would say an obligation--to
reauthorize these programs before they expire in September. We should
also make them permanent, which both the Pentagon and NASA have urged
us to do. This is in our national security interest, as well as our
economic interest and fairness to small businesses.
Arthur C. Clarke wrote:
New ideas pass through three periods: (1) It can't be done.
(2) It probably can be done, but it's not worth doing. (3) I
knew it was a good idea all along.
The SBIR and the STTR programs help visionary entrepreneurs get
through one and two to reach three. Getting to three makes America
stronger and more prosperous.
Let us make sure that we act in time.
With that, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The senior assistant legislative clerk proceeded to call the roll.
Mr. CASSIDY. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
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