[Congressional Record Volume 168, Number 157 (Wednesday, September 28, 2022)]
[House]
[Pages H8128-H8136]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SBIR AND STTR EXTENSION ACT OF 2022
Ms. VELAZQUEZ. Mr. Speaker, I move to suspend the rules and pass the
bill (S. 4900) to reauthorize the SBIR and STTR programs and pilot
programs, and for other purposes.
The Clerk read the title of the bill.
The text of the bill is as follows:
S. 4900
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``SBIR and STTR Extension Act
of 2022''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Administration; administrator.--The terms
``Administration'' and ``Administrator'' mean the Small
Business Administration and the Administrator thereof,
respectively.
(2) Federal agency; phase i; phase ii; phase iii; sbir;
sttr.--The terms ``Federal agency'', ``Phase I'', ``Phase
II'', ``Phase III'', ``SBIR'', and ``STTR'' have the meanings
given those terms, respectively, in section 9(e) of the Small
Business Act (15 U.S.C. 638(e)).
SEC. 3. REAUTHORIZATION OF SBIR AND STTR PROGRAMS AND PILOT
PROGRAMS.
Section 9 of the Small Business Act (15 U.S.C. 638) is
amended by striking ``2022'' each place that term appears and
inserting ``2025''.
SEC. 4. FOREIGN RISK MANAGEMENT.
(a) Definitions.--Section 9(e) of the Small Business Act
(15 U.S.C. 638(e)) is amended--
(1) in paragraph (13)(B), by striking ``and'' at the end;
(2) in paragraph (14), by striking the period at the end
and inserting a semicolon; and
(3) by adding at the end the following:
``(15) the term `covered individual' means an individual
who--
``(A) contributes in a substantive, meaningful way to the
scientific development or execution of a research and
development project proposed to be carried out with a
research and development award from a Federal research
agency; and
``(B) is designated as a covered individual by the Federal
research agency concerned;
``(16) the term `foreign affiliation' means a funded or
unfunded academic, professional, or institutional appointment
or position with a foreign government or government-owned
entity, whether full-time, part-time, or voluntary (including
adjunct, visiting, or honorary);
``(17) the term `foreign country of concern' means the
People's Republic of China, the Democratic People's Republic
of Korea, the Russian Federation, the Islamic Republic of
Iran, or any other country determined to be a country of
concern by the Secretary of State;
``(18) the term `malign foreign talent recruitment program'
has the meaning given such term in section 10638 of the
Research and Development, Competition, and Innovation Act
(division B of Public Law 117-167); and
``(19) the term `federally funded award' means a Phase I,
Phase II (including a Phase II award under subsection (cc)),
or Phase III SBIR or STTR award made using a funding
agreement.''.
(b) Due Diligence Program to Assess Security Risks.--
(1) In general.--Section 9 of the Small Business Act (15
U.S.C. 638) is amended by adding at the end the following:
``(vv) Due Diligence Program to Assess Security Risks.--
[[Page H8129]]
``(1) Establishment.--The head of each Federal agency
required to establish an SBIR or STTR program, in
coordination with the Administrator, shall establish and
implement a due diligence program to assess security risks
presented by small business concerns seeking a federally
funded award.
``(2) Risks.--Each program established under paragraph (1)
shall--
``(A) assess, using a risk-based approach as appropriate,
the cybersecurity practices, patent analysis, employee
analysis, and foreign ownership of a small business concern
seeking an award, including the financial ties and
obligations (which shall include surety, equity, and debt
obligations) of the small business concern and employees of
the small business concern to a foreign country, foreign
person, or foreign entity; and
``(B) assess awards and proposals or applications, as
applicable, using a risk-based approach as appropriate,
including through the use of open-source analysis and
analytical tools, for the nondisclosures of information
required under (g)(13).
``(3) Administrative costs.--
``(A) In general.--In addition to the amount allocated
under subsection (mm)(1), each Federal agency required to
establish an SBIR program may allocate not more than 2
percent of the funds allocated to the SBIR program of the
Federal agency for the cost of establishing the due diligence
program required under this subsection.
``(B) Reporting.--
``(i) In general.--Not later than December 31 of the year
in which this subparagraph is enacted, and not later than
December 31 of each year thereafter, the head of a Federal
agency that exercises the authority under subparagraph (A)
shall submit to the Committee on Small Business and the
Committee on Science, Space, and Technology of the House of
Representatives, the Committee on Small Business and
Entrepreneurship of the Senate, and the Administrator, for
the covered year--
``(I) the total funds allowed to be allocated for the cost
of establishing the due diligence program required under this
subsection;
``(II) the total amount of funds obligated or expended
under subparagraph (A); and
``(III) the due diligence activities carried out or to be
carried out using amounts allocated under subparagraph (A).
``(ii) Annual report inclusion.--The Administrator shall
include the information submitted by head of a Federal agency
under clause (i) in the next annual report submitted under
subsection (b)(7) after the Administrator receives such
information.
``(iii) Covered year.--In this subparagraph, the term
`covered year' means, with respect to the information
required under clause (i), the year covered by the annual
report submitted under subsection (b)(7) in which the
Administrator is required to include such information by
clause (ii).
``(C) Termination date.--This paragraph shall terminate on
September 30, 2025.''.
(2) Implementation.--
(A) In general.--Not later than 270 days after the date of
enactment of this Act, the head of a Federal agency required
to establish an SBIR or STTR program shall implement a due
diligence program under subsection (vv) of section 9 of the
Small Business Act (15 U.S.C. 638), as added by paragraph
(1), at the Federal agency that, to the extent practicable,
incorporates the applicable best practices disseminated under
paragraph (3).
(B) Paperwork reduction act.--Chapter 35 of title 44,
United States Code (commonly known as the ``Paperwork
Reduction Act''), shall not apply to the implementation of a
due diligence program under subsection (vv) of section 9 of
the Small Business Act (15 U.S.C. 638), as added by paragraph
(1).
(C) Briefing.--Not later than 30 days after the date of
enactment of this Act, and on a recurring basis until
implementation is complete, each Federal agency required to
establish a due diligence program under subsection (vv) of
section 9 of the Small Business Act (15 U.S.C. 638), as added
by paragraph (1), shall brief the Committee on Small Business
and Entrepreneurship of the Senate and the Committee on Small
Business and the Committee on Science, Space, and Technology
of the House of Representatives on the implementation of the
due diligence program.
(3) Best practices.--Not later than 180 days after the date
of enactment of this Act, the Administrator shall--
(A) in coordination with the Director of the Office of
Science and Technology Policy and in consultation with the
Committee on Foreign Investment in the United States,
disseminate among Federal agencies required to establish an
SBIR or STTR program best practices of those Federal agencies
for due diligence programs required under subsection (vv) of
section 9 of the Small Business Act (15 U.S.C. 638), as added
by paragraph (1); and
(B) in consultation with the Committee on Foreign
Investment in the United States, provide to Federal agencies
described in subparagraph (A) guidance on the business
relationships required to be disclosed under paragraph
(13)(G) of subsection (g) and paragraph (17)(G) of subsection
(o) of section 9 of the Small Business Act (15 U.S.C. 638),
as added by this Act.
(4) GAO study.--Not later than 1 year after the date of
enactment of this Act, and annually thereafter for 3 years,
the Comptroller General of the United States shall conduct a
study and submit to the Committee on Small Business and
Entrepreneurship and the Committee on Armed Services of the
Senate and the Committee on Small Business, the Committee on
Armed Services, and the Committee on Science, Space, and
Technology of the House of Representatives a report on the
implementation and best practices of due diligence programs
established under subsection (vv) of section 9 of the Small
Business Act (15 U.S.C. 638), as added by paragraph (1),
across Federal agencies required to establish an SBIR or STTR
program.
(5) Rule of construction.--Nothing in subsection (vv) of
section 9 of the Small Business Act (15 U.S.C. 638), as added
by paragraph (1), shall be construed to--
(A) apply to any Federal agency with a due diligence
program that applies to the SBIR or STTR programs required
under subsection (vv) of section 9 of the Small Business Act
(15 U.S.C. 638), as added by paragraph (1), in existence as
of the date of enactment of this Act; or
(B) restrict any Federal agency from taking due diligence
measures in addition to those required under such subsection
(vv) at the Federal agency.
(c) Disclosures Regarding Ties to People's Republic of
China and Other Foreign Countries.--
(1) SBIR.--Section 9(g) of the Small Business Act (15
U.S.C. 638(g)) is amended--
(A) in paragraph (11), by striking ``and'' at the end;
(B) in paragraph (12), by striking the period at the end
and inserting a semicolon; and
(C) by adding at the end the following:
``(13) require each small business concern submitting a
proposal or application for a federally funded award to
disclose in the proposal or application--
``(A) the identity of all owners and covered individuals of
the small business concern who are a party to any foreign
talent recruitment program of any foreign country of concern,
including the People's Republic of China;
``(B) the existence of any joint venture or subsidiary of
the small business concern that is based in, funded by, or
has a foreign affiliation with any foreign country of
concern, including the People's Republic of China;
``(C) any current or pending contractual or financial
obligation or other agreement specific to a business
arrangement, or joint venture-like arrangement with an
enterprise owned by a foreign state or any foreign entity;
``(D) whether the small business concern is wholly owned in
the People's Republic of China or another foreign country of
concern;
``(E) the percentage, if any, of venture capital or
institutional investment by an entity that has a general
partner or individual holding a leadership role in such
entity who has a foreign affiliation with any foreign country
of concern, including the People's Republic of China;
``(F) any technology licensing or intellectual property
sales to a foreign country of concern, including the People's
Republic of China, during the 5-year period preceding
submission of the proposal; and
``(G) any foreign business entity, offshore entity, or
entity outside the United States related to the small
business concern;
``(14) after reviewing the disclosures of a small business
concern under paragraph (13), and if determined appropriate
by the head of such Federal agency, request such small
business concern to provide true copies of any contractual or
financial obligation or other agreement specific to a
business arrangement, or joint-venture like arrangement with
an enterprise owned by a foreign state or any foreign entity
in effect during the 5-year period preceding submission of
the proposal with respect to which such small business
concern made such disclosures;''.
(2) STTR.--Section 9(o) of the Small Business Act (15
U.S.C. 638(o)) is amended--
(A) in paragraph (15), by striking ``and'' at the end;
(B) in paragraph (16), by striking the period at the end
and inserting a semicolon; and
(C) by adding at the end the following:
``(17) require each small business concern submitting a
proposal or application for a federally funded award to
disclose in the proposal or application--
``(A) the identity of all owners and covered individuals of
the small business concern who are a party to any foreign
talent recruitment program of any foreign country of concern,
including the People's Republic of China;
``(B) the existence of any joint venture or subsidiary of
the small business concern that is based in, funded by, or
has a foreign affiliation with any foreign country of
concern, including the People's Republic of China;
``(C) any current or pending contractual or financial
obligation or other agreement specific to a business
arrangement, or joint venture-like arrangement with an
enterprise owned by a foreign state or any foreign entity;
``(D) whether the small business concern is wholly owned in
the People's Republic of China or another foreign country;
``(E) the percentage, if any, of venture capital or
institutional investment by an entity that has a general
partner or individual holding a leadership role in such
entity who has a foreign affiliation with any foreign country
of concern, including the People's Republic of China;
``(F) any technology licensing or intellectual property
sales to a foreign country of concern, including the People's
Republic of
[[Page H8130]]
China, during the 5-year period preceding submission of the
proposal; and
``(G) any foreign business entity, offshore entity, or
entity outside the United States related to the small
business concern;
``(18) after reviewing the disclosures of a small business
concern under paragraph (17), and if determined appropriate
by the head of such Federal agency, request such small
business concern to provide true copies of any contractual or
financial obligation or other agreement specific to a
business arrangement, or joint-venture like arrangement with
an enterprise owned by a foreign state or any foreign entity
in effect during the 5-year period preceding submission of
the proposal with respect to which such small business
concern made such disclosures;''.
(d) Denial of Awards.--
(1) SBIR.--Section 9(g) of the Small Business Act (15
U.S.C. 638(g)), as amended by subsection (c)(1), is further
amended by adding at the end the following:
``(15) not make an award under the SBIR program of the
Federal agency to a small business concern if the head of the
Federal agency determines that--
``(A) the small business concern submitting the proposal or
application--
``(i) has an owner or covered individual that is party to a
malign foreign talent recruitment program;
``(ii) has a business entity, parent company, or subsidiary
located in the People's Republic of China or another foreign
country of concern; or
``(iii) has an owner or covered individual that has a
foreign affiliation with a research institution located in
the People's Republic of China or another foreign country of
concern; and
``(B) the relationships and commitments described in
clauses (i) through (iii) of subparagraph (A)--
``(i) interfere with the capacity for activities supported
by the Federal agency to be carried out;
``(ii) create duplication with activities supported by the
Federal agency;
``(iii) present concerns about conflicts of interest;
``(iv) were not appropriately disclosed to the Federal
agency;
``(v) violate Federal law or terms and conditions of the
Federal agency; or
``(vi) pose a risk to national security;''.
(2) STTR.--Section 9(o) of the Small Business Act (15
U.S.C. 638(o)), as amended by subsection (c)(2), is further
amended by adding at the end the following:
``(19) not make an award under the STTR program of the
Federal agency to a small business concern if the head of the
Federal agency determines that--
``(A) the small business concern submitting the proposal or
application--
``(i) has an owner or covered individual that is party to a
malign foreign talent recruitment program;
``(ii) has a business entity, parent company, or subsidiary
located in the People's Republic of China or another foreign
country of concern; or
``(iii) has an owner or covered individual that has a
foreign affiliation with a research institution located in
the People's Republic of China or another foreign country of
concern; and
``(B) the relationships and commitments described in
clauses (i) through (iii) of subparagraph (A)--
``(i) interfere with the capacity for activities supported
by the Federal agency to be carried out;
``(ii) create duplication with activities supported by the
Federal agency;
``(iii) present concerns about conflicts of interest;
``(iv) were not appropriately disclosed to the Federal
agency;
``(v) violate Federal law or terms and conditions of the
Federal agency; or
``(vi) pose a risk to national security;''.
SEC. 5. AGENCY RECOVERY AUTHORITY AND ONGOING REPORTING.
(a) SBIR.--Section 9(g) of the Small Business Act (15
U.S.C. 638(g)), as amended by section 4(d)(1), is further
amended by adding at the end the following:
``(16) require a small business concern receiving an award
under its SBIR program to repay all amounts received from the
Federal agency under the award if--
``(A) the small business concern makes a material
misstatement that the Federal agency determines poses a risk
to national security; or
``(B) there is a change in ownership, change to entity
structure, or other substantial change in circumstances of
the small business concern that the Federal agency determines
poses a risk to national security; and
``(17) require a small business concern receiving an award
under its SBIR program to regularly report to the Federal
agency and the Administration throughout the duration of the
award on--
``(A) any change to a disclosure required under
subparagraphs (A) through (G) of paragraph (13);
``(B) any material misstatement made under paragraph
(16)(A); and
``(C) any change described in paragraph (16)(B).''.
(b) STTR.--Section 9(o) of the Small Business Act (15
U.S.C. 638(o)), as amended by section 4(d)(1), is further
amended by adding at the end the following:
``(20) require a small business concern receiving an award
under its STTR program to repay all amounts received from the
Federal agency under the award if--
``(A) the small business concern makes a material
misstatement that the Federal agency determines poses a risk
to national security; or
``(B) there is a change in ownership, change to entity
structure, or other substantial change in circumstances of
the small business concern that the Federal agency determines
poses a risk to national security; and
``(21) require a small business concern receiving an award
under its STTR program to regularly report to the Federal
agency and the Administration throughout the duration of the
award on--
``(A) any change to a disclosure required under
subparagraphs (A) through (G) of paragraph (17);
``(B) any material misstatement made under paragraph
(20)(A); and
``(C) any change described in paragraph (20)(B).''.
(c) Paperwork Reduction Act.--Chapter 35 of title 44,
United States Code (commonly known as the ``Paperwork
Reduction Act''), shall not apply to the implementation of
paragraphs (16) and (17) of subsection (g) or paragraphs (20)
and (21) of subsection (o) of section 9 of the Small Business
Act (15 U.S.C. 638), as added by subsections (a) and (b).
SEC. 6. REPORT ON ADVERSARIAL MILITARY AND FOREIGN INFLUENCE
IN THE SBIR AND STTR PROGRAMS.
(a) Covered Agency Defined.--In this section, the term
``covered agency'' means--
(1) the Department of Defense;
(2) the Department of Energy;
(3) the Department of Health and Human Services; or
(4) the National Science Foundation.
(b) Requirement.--
(1) In general.--Except as provided in paragraph (2), not
later than 180 days after the date of enactment of this Act,
the head of each covered agency shall submit a report
assessing the adversarial military and foreign influences in
the SBIR and STTR programs at the covered agency to--
(A) the Committee on Armed Services, the Committee on Small
Business and Entrepreneurship, and the Committee on Commerce,
Science, and Transportation of the Senate; and
(B) the Committee on Armed Services, the Committee on Small
Business, and the Committee on Science, Space, and Technology
of the House of Representatives.
(2) Department of health and human services.--The Secretary
of Health and Human Services shall submit 2 reports under
paragraph (1)--
(A) 1 assessing the adversarial military and foreign
influences in the SBIR and STTR programs of the National
Institutes of Health; and
(B) 1 assessing the adversarial military and foreign
influences in the SBIR and STTR programs of the Department of
Health and Human Services other than those of the National
Institutes of Health.
(c) Contents.--Each report submitted by a covered agency
under subsection (b) shall include an analysis of--
(1) the national security and research and integrity risks
of the SBIR and STTR programs of the covered agency; and
(2) the capability of such covered agency to identify and
mitigate such risks.
(d) Form.--Each report submitted under subsection (b) shall
be in unclassified form, but may include a classified annex.
(e) Independent Entity Contracting.--The head of each
covered agency, in coordination with the heads of other
Federal agencies, as appropriate, may enter into a contract
with an independent entity to prepare a report required under
subsection (b).
SEC. 7. PROGRAM ON INNOVATION OPEN TOPICS.
(a) In General.--Section 9 of the Small Business Act (15
U.S.C. 638), as amended by this Act, is further amended--
(1) in subsection (b)(7)--
(A) in subparagraph (G), by striking ``and'' at the end;
and
(B) by adding at the end the following:
``(I) the number of applications submitted to each Federal
agency participating in the SBIR or STTR program in
innovation open topics as compared to conventional topics,
and how many small business concerns receive funding from
open topics compared to conventional topics;
``(J) the total number and dollar amount, and average size,
of awards made by each Federal agency participating in the
SBIR or STTR program, by phase, from--
``(i) open topics; and
``(ii) conventional topics;''; and
(2) by adding at the end the following:
``(ww) Program on Innovation Open Topics.--
``(1) Establishment.--Not later than 180 days after the
date of enactment of this subsection, the Secretary of
Defense shall establish innovation open topic activities
using the SBIR and STTR programs of the Department of Defense
in order to--
``(A) increase the transition of commercial technology to
the Department of Defense;
``(B) expand the small business nontraditional industrial
base;
``(C) increase commercialization derived from investments
of the Department of Defense; and
``(D) expand the ability for qualifying small business
concerns to propose technology solutions to meet the needs of
the Department of Defense.
``(2) Frequency.--The Secretary of Defense shall conduct
not less than 1 open topic announcement at each component of
the Department of Defense per fiscal year.
[[Page H8131]]
``(3) Briefing.--Not later than 180 days after the date of
enactment of this subsection, the Secretary of Defense shall
provide a briefing on the establishment of the program
required under paragraph (1) to--
``(A) the Committee on Armed Services and the Committee on
Small Business and Entrepreneurship of the Senate; and
``(B) the Committee on Small Business, the Committee on
Armed Services, and the Committee on Science, Space, and
Technology of the House of Representatives.''.
(b) GAO Report.--Not later than 1 year after the date of
enactment of this Act, and annually thereafter for 3 years,
the Comptroller General of the United States shall submit to
Congress and issue a publicly available report comparing open
topics and conventional topics under the SBIR and STTR
programs that includes, to the extent practicable--
(1) an assessment of the percentage of small business
concerns that progress from Phase I to Phase II awards, then
to Phase III awards;
(2) the number of awards under the SBIR and STTR programs
made to first-time applicants and first-time awardees;
(3) the number of awards under the SBIR and STTR programs
made to non-traditional small business concerns, including
those owned by women, minorities, and veterans;
(4) a description of outreach and assistance efforts by the
Department of Defense to encourage and prepare new and
diverse small business concerns to participate in the program
established under subsection (ww) of section 9 of the Small
Business Act (15 U.S.C. 638), as added by subsection (a);
(5) the length of time to review and disburse awards under
such subsection (ww), evaluated in a manner enabling
normalized comparisons of such times taken by each Federal
agency that is required to establish an SBIR or STTR program
and offers open topics;
(6) the ratio, and an assessment, of the amount of funding
allocated towards open topics as compared to conventional
topics at each Federal agency that is required to establish
an SBIR or STTR program and offers open topics; and
(7) a comparison of the types of technology and end users
funded under open topics compared to the types of technology
and end users funded under conventional topics.
SEC. 8. INCREASED MINIMUM PERFORMANCE STANDARDS FOR
EXPERIENCED FIRMS.
Section 9 of the Small Business Act (15 U.S.C. 638), as
amended by this Act, is further amended--
(1) in subsection (b)(7), by adding at the end the
following:
``(K) the minimum performance standards established under
subsection (qq), including any applicable modifications under
paragraph (3) of such subsection, and the number of small
business concerns that did not meet those minimum performance
standards, provided that the Administrator does not publish
any personally identifiable information, the identity of each
such small business concern, or any otherwise sensitive
information; and
``(L) the aggregate number and dollar amount of SBIR and
STTR awards made pursuant to waivers under subsection
(qq)(3)(E), provided that the Administrator does not publish
any personally identifiable information, the identity of each
such small business concern, or any otherwise sensitive
information;''; and
(2) in subsection (qq)--
(A) by redesignating paragraphs (3) and (4) as paragraphs
(4) and (5), respectively;
(B) by inserting after paragraph (2) the following:
``(3) Increased minimum performance standards for
experienced firms.--
``(A) Progress to phase ii success.--
``(i) In general.--With respect to a small business concern
that received or receives more than 50 Phase I awards during
a covered period, each minimum performance standard
established under paragraph (1)(A)(ii) shall be doubled for
such covered period.
``(ii) Consequence of failure to meet standard.--If the
head of a Federal agency determines that a small business
concern that received a Phase I award from the Federal agency
is not meeting an applicable increased minimum performance
standard modified under clause (i), the small business
concern may not receive more than 20 total Phase I awards and
Phase II awards under subsection (cc) from each Federal
agency during the 1-year period beginning on the date on
which such determination is made.
``(iii) Covered period defined.--In this subparagraph, the
term `covered period' means a consecutive period of 5 fiscal
years preceding the most recent fiscal year.
``(B) Progress to phase iii success.--
``(i) In general.--Each minimum performance standard
established under paragraph (2)(A)(ii) shall--
``(I) with respect to a small business concern that
received or receives more than 50 Phase II awards during a
covered period, require an average of $250,000 of aggregate
sales and investments per Phase II award received during such
covered period; and
``(II) with respect to a small business concern that
received or receives more than 100 Phase II awards during a
covered period, require an average of $450,000 of aggregate
sales and investments per Phase II award received during such
covered period.
``(ii) Consequence of failure to meet standard.--If the
head of a Federal agency determines that a small business
concern that received a Phase I award from the agency is not
meeting an applicable increased minimum performance standard
modified under clause (i), the small business concern may not
receive more than 20 total Phase I awards and Phase II awards
under subsection (cc) from each agency during the 1-year
period beginning on the date on which such determination is
made.
``(iii) Documentation.--
``(I) In general.--A small business concern that is subject
to an increased minimum performance standard described in
clause (i) shall submit to the Administrator supporting
documentation evidencing that all covered sales of the small
business concern were properly used to meet the increased
minimum performance standard.
``(II) Covered sale defined.--In this clause, the term
`covered sale' means a sale by a small business concern--
``(aa) that the small business concern claims to be
attributable to an SBIR or STTR award;
``(bb) for which no amount of the payment was or is made
using Federal funds;
``(cc) which the small business concern uses to meet an
applicable increased minimum performance standard under
clause (i); and
``(dd) that was or is received during the 5 fiscal years
immediately preceding the fiscal year in which the small
business concern uses the sale to meet the increased minimum
performance standard.
``(iv) Covered period defined.--In this subparagraph, the
term `covered period' means a consecutive period of 10 fiscal
years preceding the most recent 2 fiscal years.
``(C) Patents for increased minimum performance
standards.--A small business concern with respect to which an
increased minimum performance standard under subparagraph (B)
applies may not meet the increased minimum performance
standard by obtaining patents.
``(D) Effective date.--Subparagraphs (A) through (C) shall
take effect on April 1, 2023.
``(E) Waiver.--
``(i) In general.--The Administrator may, upon the request
of a senior official of a Federal agency, grant a waiver with
respect to a topic for the SBIR or STTR program of the
Federal agency if--
``(I) the topic is critical to the mission of the Federal
agency or relates to national security; and
``(II) the official submits to the Administrator a request
for the waiver in accordance with clause (iii).
``(ii) Waiver effects.--If the Administration grants a
waiver with respect to a topic for the SBIR or STTR program
of a Federal agency, subparagraphs (A)(ii) and (B)(ii) shall
not prohibit any covered small business concern from
receiving an SBIR or STTR award under such topic.
``(iii) Agency request and congressional notification.--Not
later than 15 days before the release of a solicitation
including a topic for which a senior official of a Federal
agency is requesting a waiver under clause (i), the senior
official shall submit to the Administrator, the Committee on
Small Business and the Committee on Science, Space, and
Technology of the House of Representatives, and the Committee
on Small Business and Entrepreneurship of the Senate a
request for the waiver.
``(iv) Administrator determination and congressional
notification.--Not later than 15 days after receiving a
request for a waiver under clause (i), the Administrator
shall make a determination with respect to the request and
notify the senior official at the Federal agency that made
the request, the Committee on Small Business and the
Committee on Science, Space, and Technology of the House of
Representatives, and the Committee on Small Business and
Entrepreneurship of the Senate of the determination.
``(v) Definitions.--In this subparagraph:
``(I) Covered small business concern.--The term `covered
small business concern' means a small business concern that
is subject to the consequences under subparagraph (A)(ii) or
(B)(ii) pursuant to a determination by the head of a Federal
agency that such small business concern did not meet an
increased minimum performance standard that was applicable to
such small business concern.
``(II) Senior official.--The term `senior official' means
an individual appointed to a position in a Federal agency
that is classified above GS-15 pursuant section 5108 of title
5, United States Code, or any equivalent position, as
determined by the Administrator.
``(F) Reporting.--
``(i) In general.--Not later than July 1, 2023, and
annually thereafter, the Administrator shall submit to
Congress a list of the small business concerns that did not
meet--
``(I) an applicable minimum performance standard
established under paragraph (1)(A)(ii) or (2)(A)(ii); or
``(II) an applicable increased minimum performance
standard.
``(ii) Waivers.--Each list submitted under clause (i) shall
identify each small business concern that received an SBIR or
STTR award pursuant to a waiver granted under subparagraph
(E) by the Administrator during the period covered by the
list.
``(iii) Confidentiality.--Each list submitted under clause
(i) shall be confidential and exempt from disclosure under
section 552(b)(3) of title 5, United States Code (commonly
known as the `Freedom of Information Act').
[[Page H8132]]
``(G) Implementation.--Not later than April 1, 2023, the
Administration shall implement the increased minimum
performance standards under this paragraph.
``(H) Rules of construction.--Nothing in this paragraph
shall be construed--
``(i) to prohibit a small business concern from
participating in a Phase I (or Phase II if under the
authority of subsection (cc)) of an SBIR or STTR program
under paragraph (1)(B) or (2)(B) solely on the basis of a
determination by the head of a Federal agency that the small
business concern is not meeting an increased minimum
performance standard; or
``(ii) to prevent the head of a Federal agency from
implementing more restrictive limitations on the number of
federally funded Phase I awards and direct to Phase II awards
under subsection (cc) that may be awarded to a small business
concern than the limitations described in subparagraphs
(A)(ii) and (B)(ii).
``(I) Termination.--This paragraph shall terminate on
September 30, 2025.'';
(C) in paragraph (5), as so redesignated, by striking
``paragraph (3)(A)'' and inserting ``paragraph (4)(A)''; and
(D) by adding at the end the following:
``(6) Inspector general audit.--Not later than 1 year after
the date on which the Administrator implements the increased
minimum performance standards under paragraph (3), and
periodically thereafter, the Inspector General of the
Administration shall--
``(A) conduct an audit on whether the small business
concerns subject to increased minimum performance standards
under paragraph (3)(B) verified--
``(i) the sales by and investments in the small business
concerns--
``(I) during the 5 fiscal years immediately preceding the
fiscal year in which the small business concern used such
sales and investments to meet an applicable increased
performance standard; and
``(II) as a direct result of a Phase I award or Phase II
award made under subsection (cc) during the covered period
(as defined in paragraph (3)(B)(iv)), consistent with the
definition of Phase III, as applicable;
``(ii) any third-party revenue the small business concerns
list as investments or incomes to meet the increased minimum
performance standard--
``(I) is a direct result of a Phase I award or Phase II
award made under subsection (cc) during the covered period
(as defined in paragraph (3)(B)(iv)); and
``(II) consistent with the requirements of the
Administrator as in effect on September 30, 2022, or any
successor requirements; and
``(iii) any dollar amounts such small business concerns
list as investments or income to meet such increased minimum
performance standard the providence of which is unclear and
that is not directly attributable to a Phase I award or Phase
II award made under subsection (cc) during the covered period
(as defined in paragraph (3)(B)(iv)), consistent with the
definition of Phase III, as applicable;
``(B) assess the self-certification requirements for the
minimum performance standards established under paragraph
(2)(A)(ii) and the increased minimum performance standards
under paragraph (3)(B); and
``(C) submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business and the Committee on Science, Space, and Technology
of the House of Representatives a report on the audit
conducted under subparagraph (A) and the assessment conducted
under subparagraph (B).
``(7) Increased minimum performance standard defined.--In
this subsection, the term `increased minimum performance
standard' means a minimum performance standard established
under paragraph (1)(A)(ii) or (2)(A)(ii) as modified under
subparagraph (A) or (B), respectively, of paragraph (3) with
respect to a small business concern.''.
SEC. 9. PROHIBITION AGAINST WRITING SOLICITATION TOPICS.
(a) In General.--Section 9 of the Small Business Act (15
U.S.C. 638), as amended by this Act, is further amended by
adding at the end the following subsection:
``(xx) Additional Provisions Relating to Solicitation
Topics.--
``(1) In general.--A Federal agency required to establish
an SBIR or STTR program shall implement a multi-level review
and approval process within the Federal agency for
solicitation topics to ensure adequate competition and that
no private individual or entity is shaping the requirements
for eligibility for the solicitation topic after the
selection of the solicitation topic, except that the Federal
agency may amend the requirements to clarify the solicitation
topic.
``(2) Referral.--A Federal agency that does not comply with
paragraph (1) shall be referred to the Inspector General of
the Administration for further investigation.''.
SEC. 10. GAO STUDY ON MULTIPLE AWARD WINNERS.
Not later than 18 months after the date of enactment of
this Act, the Comptroller General of the United States shall
conduct a study and submit to the Committee on Small Business
and Entrepreneurship of the Senate and the Committee on Small
Business and the Committee on Science, Space, and Technology
of the House of Representatives a report, which shall be made
publicly available, on small business concerns that are
awarded not less than 50 Phase II awards under the SBIR or
STTR programs during the consecutive period of 10 fiscal
years preceding the most recent 2 fiscal years, including, to
the extent practicable, an analysis of--
(1) the impact of the small business concerns on the SBIR
and STTR programs;
(2) the ratio of the number of Phase II awards received by
the small business concerns to the total number of Phase II
awards;
(3) the ability of the small business concerns to
commercialize and meet the tenets of the SBIR and STTR
programs;
(4) the impact on new entrants and seeding technology
necessary to the Federal agency mission or commercial markets
and, with respect to the Department of Defense, whether the
types of technology the small business concerns are pursuing
are primarily hardware, software, or system components for
the warfighter;
(5) an evaluation and study of varying levels of award caps
and lifetime program earning caps;
(6) an assessment of the increased minimum performance
standards under paragraph (3) of section 9(qq) of the Small
Business Act (15 U.S.C. 638(qq)), as added by section 8, on
the behavior of those concerns and on the SBIR and STTR
programs, and whether to continue such increased minimum
performance standards; and
(7) recommendations on whether alternative minimum
performance standards under section 9(qq) of the Small
Business Act (15 U.S.C. 638(qq)) should be considered, and
the extent to which such alternative minimum performance
standards preserve the competitive, merit-based foundation of
the SBIR and STTR programs.
SEC. 11. GAO REPORT ON SUBCONTRACTING IN SBIR AND STTR
PROGRAMS.
Not later than 1 year after the date of the enactment of
this Act, the Comptroller General of the United States shall
submit to the Committee on Small Business and
Entrepreneurship of the Senate and the Committee on Small
Business and the Committee on Science, Space, and Technology
of the House of Representatives a report evaluating, to the
extent practicable, the following:
(1) The extent to which SBIR awardees and STTR awardees are
in compliance with the Federal Funding Accountability and
Transparency Act (31 U.S.C. 6101 note).
(2) The extent to which SBIR awardees and STTR awardees
enter into subcontracting agreements with respect to an SBIR
or STTR award.
(3) The total number and dollar amount of subcontracts
entered into between an SBIR awardee or an STTR awardee and a
concern that is not a small business concern (including such
concerns that are defense contractors) with respect to an
SBIR or STTR award.
(4) A description of the type and purpose of subcontracting
agreements described in paragraph (2).
(5) An analysis of whether the use of subcontracts by an
SBIR awardee or an STTR awardee is consistent with the
purposes of section 9 of the Small Business Act (15 U.S.C.
638).
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
New York (Ms. Velazquez) and the gentleman from Missouri (Mr.
Luetkemeyer) each will control 20 minutes.
The Chair recognizes the gentlewoman from New York.
General Leave
Ms. VELAZQUEZ. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days in which to revise and extend their remarks
and include extraneous material on the measure under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from New York?
There was no objection.
Ms. VELAZQUEZ. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise today in support of S. 4900, the SBIR and STTR
Extension Act of 2022.
Let me begin by thanking Ranking Member Luetkemeyer and my colleagues
on the Senate Small Business Committee and the House Committee on
Science, Space, and Technology for their work on this legislation.
Mr. Speaker, I especially want to thank Chairwoman Eddie Bernice
Johnson, who is retiring at the end of this Congress. Her knowledge and
expertise of the programs were pivotal to these negotiations.
Today's bill extends the SBIR and STTR programs and six related pilot
programs for 3 years. Reauthorizing them is vital to thousands of small
businesses and research institutions that partner with 11 agencies to
develop solutions to some of our country's most difficult challenges.
Since their founding 40 years ago, SBIR and STTR have launched some
of our Nation's most innovative enterprises and products that have
become household names. Companies like iRobot, Sonicare electric
toothbrushes, 23andMe, LASIK eye surgery, and Qualcomm wireless
communications all got their start through SBIR/STTR.
[[Page H8133]]
More innovative technology is on the way. In fiscal year 2021 alone,
Federal agencies leveraged nearly $4 billion in awards to back 4,000
small businesses and nearly 7,000 projects. Awardees are leading the
way in our efforts to fight climate change, modernize manufacturing,
and create breakthroughs in lifesaving medical technologies.
S. 4900 gives them the ability to continue their work and lead
America's innovation by providing stability to both the small
businesses and agencies for the next 3 years.
It builds on efforts to strengthen Federal research security through
due diligence reviews to prevent malign foreign countries from stealing
technologies developed through SBIR and STTR.
It also establishes higher benchmarks for more experienced firms to
commercialize their technologies and includes various studies and more
detailed reporting to increase oversight and inform future program
changes.
Unfortunately, S. 4900 does not include everything we wanted to
accomplish during this reauthorization, but I remain committed to
coming together again in the future to have those conversations.
Our monthslong bipartisan and bicameral negotiations will avoid a
devastating lapse and protect thousands of jobs. Today, we are here
considering a hard-fought compromise to reauthorize the SBIR and STTR
programs.
Mr. Speaker, I urge Members to vote ``yes,'' and I reserve the
balance of my time.
Mr. LUETKEMEYER. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise in support in of S. 4900, the SBIR and STTR
Extension Act of 2022.
The Small Business Innovation Research and Small Businesses
Technology Transfer, or SBIR and STTR programs, are vital to the
success of many small entities and have helped create thousands of new
jobs by fostering innovation and stimulating the economy through
cutting-edge research. SBIR and STTR's mission is to support scientific
excellence and technological innovation for small businesses.
For the last 40 years, these programs have helped firms develop new
technologies that have directly assisted Federal agencies meet their
R&D needs. The American warfighter is no doubt stronger due to these
programs.
However, a recent Department of Defense report revealed foreign
adversaries have been exploiting the SBIR through shell companies,
planted government researchers, and state-sponsored talent programs.
The report found that the People's Republic of China has become a large
beneficiary of SBIR and STTR. This is unacceptable, and the status quo
must not continue, Mr. Speaker.
{time} 1415
The programs must have heightened awareness and protections in place
to prevent nefarious abuse. This legislation, crafted over months of
negotiations, provides significant reforms to combat malign foreign
influence and protect our small businesses from Chinese acquisition of
innovation technologies.
Specifically, this bill mandates that agencies establish strong due-
diligence safeguards to assess security risks and prevent influence
from bad actors. It requires companies to disclose any business ties,
investments, and contracts with China, and it gives agencies authority
to deny any application if certain relationships are deemed a risk to
national security.
In addition to safeguarding small businesses from China, this bill
curbs abuse by multiple award winners, or SBIR mills. Mills are firms
that consume a disproportionate number of awards but have low
commercialization rates. These mills will have to meet enhanced
performance standards in order to apply for new awards. These
benchmarks will hold mills accountable and ensure that the programs are
focusing on commercializing projects and attracting more private
capital investments.
Finally, S. 4900 strengthens congressional oversight, increases
public transparency, and safeguards taxpayer dollars during a time
where government overreach has run rampant, and transparency has been
limited.
These reforms are a win for small businesses and will protect U.S.
R&D and innovative technologies.
I thank Chairwoman Velazquez, Ranking Member Lucas, Chairwoman Eddie
Bernice Johnson, as well as Senators Cardin, Paul, and Ernst for
working in a bipartisan manner to ensure these programs are
reauthorized before the end of the month.
I encourage all my colleagues to support S. 4900, which unanimously
passed the Senate last week.
Mr. Speaker, I reserve the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, I yield 5 minutes to the gentlewoman from
Michigan (Ms. Stevens), the chairwoman of the Science, Space, and
Technology Subcommittee on Research and Technology.
Ms. STEVENS. Mr. Speaker, I rise today in support of S. 4900, the
SBIR and STTR Extension Act of 2022. This is an exciting and thrilling
day, and we couldn't push with more urgency to pass this legislation.
The Small Business Innovation Research Program, the SBIR, is well-
known for its tagline of ``America's seed fund,'' as it inspires small
businesses across the country to transform their ideas into marketable
products and services.
On behalf of Chairwoman Johnson, I thank the Chairwoman for the Small
Business Committee for bringing us here to this moment and, of course,
our colleagues on the other side of the aisle, for joining us in a
bipartisan action to improve America's competitiveness.
The National Science Foundation piloted the SBIR program in the
1970s, at the urging of Members who recognized that investments in
small business innovation benefits our Nation as a whole and creates
jobs. Due to its success, Congress made it a governmentwide program.
Decades later, SBIR has given back to the taxpayer in immeasurable
ways. It has been so successful that the SBIR model has been replicated
in 17 countries.
Since coming to Congress myself, I devote Mondays to visiting
manufacturers or businesses in my district, in what I call
Manufacturing Mondays, which showcases southeastern Michigan's
innovation economy and our workforce. I have seen the powerful impact
of the SBIR program firsthand in these visits; and previous to coming
to Congress, I helped companies and small business innovators apply for
these grants.
Last December, I had the privilege of visiting the team at
Geofabrica, an Additive Manufacturing Technology Development company in
Auburn Hills, Michigan, to hear about their exciting, DOD-funded SBIR
work. Their CEO shared something that struck a chord. He said:
``Geofabrica would not have undertaken a fraction of its technology
development if it were not for the SBIR and STTR programs.''
Think about that, my friends. These programs make discovery possible
for small businesses; some beginning at the university level, and some
that are small businesses in their infancy stage.
Over the past 5 years, the SBIR program has awarded small businesses
in Michigan more than $348 million in funding for R&D. This has led to
incredibly exciting discoveries and inventions in Michigan, from the
development of a handheld technology that enables farmers to accurately
detect nitrates in their own fields to save farmers money, while also
protecting our freshwater systems from toxic algal blooms; to the
testing of new ligand for PET imaging of the brain during clinical
trials for new memory disorder drugs. This is all coming from this
program we are going to reauthorize today.
The last comprehensive reauthorization for the SBIR program was 11
years ago. We have opted or just continued to extend the program, like
we did in 2016, leaving powerful opportunities to strengthen SBIR out
of the conversation. My, how the times have changed.
I began this Congress ready to work on updating SBIR in order to
support our entrepreneurs, our job creators, and the place that I am so
privileged to call home and represent, Oakland County, Michigan, the
home of automation alley.
Congressman and Dr. Jim Baird and myself ushered in H.R. 4033, a
smart and effective way to make improvements to SBIR. Unfortunately,
our bill was not passed by the Senate, and it is not the complete
legislation before us today. So even as we provide much-
[[Page H8134]]
needed stability to the program with today's vote, we still have work
to do.
One of my own priorities is to expand program outreach to enable
agencies to reach more first-time entrepreneurs, particularly those who
are Black, Hispanic, Indigenous, and female entrepreneurs, people
innovating in their home and alongside their family, particularly
during these disruptive times of the COVID-19 pandemic. All of these
individuals have innovations and businesses that have been long
underfunded.
I also hope to see enhanced support for technology commercialization
within the program, including through additional technical support to
businesses and by providing agencies a wider range of funding tools to
meet our unique needs.
Mr. Speaker, I call on my colleagues to join me in passing S. 4900
today for SBIR reauthorization.
Mr. LUETKEMEYER. Mr. Speaker, I yield such time as he may consume to
the distinguished gentleman from Oklahoma (Mr. Lucas), the Republican
leader of the Science, Space, and Technology Committee.
Mr. LUCAS. Mr. Speaker, I thank my friend for yielding me this time.
Mr. Speaker, I rise in support of the SBIR and STTR Extension Act.
This bill is extremely timely, as the authorizations for these programs
expire in just a few days.
I am pleased that the bill we are considering today represents a
bipartisan, bicameral agreement that provides both small businesses and
agencies clarity by reauthorizing the programs for another 3 years.
The SBIR and STTR programs play an important role in our innovation
economy. Through these programs, research agencies provide
opportunities to small businesses who are then able to leverage
private-sector funding to propel research forward.
The programs incentivize economic growth in two ways: They support
entrepreneurship and job creation at small businesses across the
country. They also support high-risk research to drive breakthrough
technologies that make America more competitive.
These programs are a notable example of how public-private
partnerships can provide value and stimulate innovation. Importantly,
this reauthorization includes several reforms to the programs that are
priorities for Republican Members, including: Protecting our research
enterprise, bolstering transparency and oversight, and focusing on
successful commercialization.
I am pleased that this reauthorization includes strong due diligence
measures that each agency with an SBIR or STTR program must enforce.
These safeguards build on the bipartisan research security framework
that the Science Committee has championed.
Additionally, an increased focus on transparency and oversight of the
programs will bolster public transparency, safeguard taxpayer dollars,
and provide more opportunities to new small business applicants.
I thank my colleagues on the House Small Business Committee for
working with me to reach this bipartisan agreement, and, in particular,
I thank Ranking Member Luetkemeyer for his leadership throughout the
process.
As always, many thanks to my Chairwoman, Eddie Bernice Johnson, for
her tireless work to ensure that the Science, Space, and Technology
Committee remains a bipartisan, productive committee focused on
legislating.
The SBIR and STTR programs are vital to our research enterprise,
especially as we strive to maintain American leadership and technology.
I urge my colleagues to support this legislation.
Ms. VELAZQUEZ. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Pennsylvania (Ms. Houlahan).
Ms. HOULAHAN. Mr. Speaker, I rise today also in support of S. 4900,
the SBIR and STTR Extension Act of 2022. This bipartisan legislation is
both timely and necessary to ensure that our Nation remains on the
forefront of innovation, research, and development of the products and
technology of our future.
As an entrepreneur myself by trade, and with experience scaling
several businesses in Pennsylvania, I know personally just how
important that seed funding can be to a business' success and to the
potential to get its products to the shelves.
The Small Business Innovation Research and Technology Transfer
Programs, otherwise known as America's seed fund, offer competitive
Federal awards to small firms in order to tackle the 21st century
problems and needs. Simply put, funds from these programs move
innovative technologies from concept to marketplace, or from the lab to
our government programs and systems.
Despite the overwhelming success of these programs, there is one
major problem that we have in Congress that we all must address, and
that is we are standing here today. The SBIR and STTR programs are set
to expire in just 2 short days unless we come together and pass this
bill and send it to the President's desk.
The consequences of a program lapse would be so devastating on many,
many fronts. For instance, the Department of Defense has shared that
failure to reauthorize this program will result in approximately 1,200
warfighting needs not being addressed; not to mention that these
programs are remarkable taxpayer investments, returning $22 to the
economy for every $1 spent on projects at the DOD.
I have been proud to work with my colleagues across the Small
Business and the Armed Service Committees to lead this effort to extend
the authorization of these critical programs. Indeed, in June, I
successfully offered a bipartisan amendment to prevent a harmful
program lapse in our annual defense bill. As the defense bill is,
unfortunately, still pending in the Senate, I thank Senators Cardin and
Ernst for their sponsorship of this important legislation, which will
reauthorize the SBIR and STTR programs for an additional 3 years.
Furthermore, this legislation adds measures aimed at commercializing
projects and expanding Federal research security to protect against
technology theft.
I thank the leadership for their support. Time is of the essence, and
I urge my colleagues to support the bill.
Mr. LUETKEMEYER. Mr. Speaker, I yield such time as she may consume to
the gentlewoman from California (Mrs. Kim), a valuable member on the
Small Business Committee and a strong advocate for entrepreneurs.
Mrs. KIM of California. Mr. Speaker, I thank Ranking Member
Luetkemeyer for yielding.
Mr. Speaker, I rise in strong support of the SBIR and STTR Extension
Act of 2022. This bipartisan legislation reauthorizes the Small
Business Innovation Research and Small Business Technology Transfer
Programs for 3 years and implements several reforms to strengthen the
programs for years to come.
This bill safeguards taxpayer dollars by ensuring that we increase
the rate of successful commercialization, prohibits our adversaries
from reaping the benefits of our SBIR and STTR investments, and
encourages the rapid development of emerging technologies that are
vital for our national security.
In addition, this legislation would allow the Department of Defense
to adopt the successful open topic solicitation process pioneered by
the Air Force. The open topic solicitation will attract new small
businesses into the SBIR program, accelerate the development of
emerging technologies, broaden program access to young startups, and
increase the potential for commercial impact.
The SBIR and STTR programs are important tools for small businesses
to research, develop, and commercialize innovative technologies and
help create good-paying jobs.
As we all know, the CCP is taking concerted steps to bridge the
innovation gap with the United States and knock us down as the world
leader in innovation. We must never relent our country's position as
the leading innovator and creator of emerging technologies.
I thank Ranking Members Luetkemeyer and Lucas and Chairwomen
Velazquez and Johnson for their leadership in bringing a successful,
bicameral negotiation to reauthorize SBIR and STTR programs.
I urge my colleagues to support this underlying legislation and
continue our country's support for our small businesses and innovation.
{time} 1430
Ms. VELAZQUEZ. Mr. Speaker, I reserve the balance of my time.
[[Page H8135]]
Mr. LUETKEMEYER. Mr. Speaker, I yield such time as he may consume to
the gentleman from Wisconsin (Mr. Fitzgerald), a very valuable,
experienced member of our Committee on Small Business and another
strong advocate for the entrepreneurs of our economy.
Mr. FITZGERALD. Mr. Speaker, I thank the ranking member for yielding.
I rise in support of S. 4900, which would reauthorize the Small
Business Innovation Research and Small Business Technology Transfer
programs.
In addition to extending the SBIR and STTR programs for 3 years, this
bill contains several important provisions that safeguard our
government and its research from foreign entities and enhance
benchmarks for those companies that have received multiple awards.
Since 1992, the SBIR and STTR programs have helped promote public-
private partnership and small business innovation by requiring agencies
with sizable R&D needs to set aside a portion of their budget for small
business participation.
As many of the speakers said before me, the return on investment has
been nothing short of impressive. In the Department of Defense alone,
between 1995 and 2018, the SBIR and STTR programs resulted in $28
billion in new product sales to the U.S. military, $347 billion in
total economic output, and the creation of more than 1.5 million jobs.
But with this amount of participation comes the likelihood of malign
influence and fraud within the program. This was evidenced by a DOD
report that found China was using shell companies in its Thousand
Talents Program to profit off federally funded research programs like
these two we are talking about here this afternoon.
Having been part of the negotiating process during my time as a
conferee for the COMPETES/USICA bill, the issue of combating foreign
influence was certainly top of mind.
I am pleased that both sides were able to come to an agreement and
understand the importance of safeguarding much of this research.
Not only will this bill require companies that apply for SBIR and
STTR awards to disclose any ties to China, but it will also require
Federal agencies to bolster their due diligence efforts to ensure our
intellectual property is fully protected.
Most importantly, the bill also requires DOD to establish an open
topic solicitation, allowing small businesses the opportunity to
showcase how their innovations can be beneficial to the actual
warfighter. The GAO believes this will be more than efficiently laid
out and planned and that new companies can be bolstered with this small
business innovation.
Mr. Speaker, I urge my colleagues to vote ``yes.''
Ms. VELAZQUEZ. Mr. Speaker, I reserve the balance of my time.
Mr. LUETKEMEYER. Mr. Speaker, I yield such time as he may consume to
the gentleman from Nebraska (Mr. Flood), one of our newest Members who
has joined our committee and is doing a fantastic job representing
small businesses and is another strong advocate for the entrepreneurs
of our country.
Mr. FLOOD. Mr. Speaker, I rise to support the SBIR and STTR Extension
Act of 2022.
I thank Chair Velazquez and Ranking Member Luetkemeyer for their work
in a bipartisan fashion. I also thank Senators Ernst and Cardin for
what they have done for this legislation. I am pleased that this bill
has been brought to the floor in an expedited fashion.
The Small Business Innovation Research and Small Business Technology
Transfer Extension Act is an important piece of legislation, and the
changes this bill brings to these programs are urgently needed.
For those who are not familiar, the Small Business Innovation
Research program was created in 1982. The program was intended to spur
American innovation and harness ingenuity by increasing small business
engagement in federally funded research and development.
More recently, however, the Chinese Government has been manipulating
this program. A report from the Department of Defense in April 2021
revealed some of the tactics China has used to this end.
The DOD revealed instances where companies were created, received
SBIR grants, and then the founders mysteriously dissolved the company.
Upon further investigation, it became clear that these companies were
either recruited to China or were formed with the intent of returning
to China from the start.
Either way, the result was the same: The American taxpayers funded
projects that were stolen by the Chinese Government. This was simply an
unacceptable status quo.
This bill fixes those problems. It implements strong safeguards
against the influence of China or other foreign actors, and it creates
new reporting requirements for these programs that will ensure taxpayer
dollars are properly used.
This bill also brings the SBIR back to its original purpose: to spur
innovation and unlock the ingenuity of American small businesses.
With these changes to the program, we can make sure the SBIR and STTR
are stronger and more accessible for entrepreneurs in Nebraska and
across the country.
Mr. Speaker, I urge a ``yes'' vote.
Mr. LUETKEMEYER. Mr. Speaker, I yield myself the balance of my time
for closing.
The SBIR and STTR Extension Act of 2022 will reauthorize the programs
for 3 years and address congressional concerns by establishing research
security measures, increasing transparency and oversight, and focusing
on commercialization.
I think, as you have heard the speakers this afternoon, in my mind,
we have two big problems that we are solving here. Besides the
extension of these programs, which I think are important to the
national defense of our country, for one thing, I think it also helps
spur entrepreneurial and investment technology that I think is vital to
our country, and we stop the use of some of these programs as ATMs for
different companies. I think we also put a stop to the Chinese abuse of
these programs, as well.
I think those are the two highlights that are really important in
these programs. They have done a good job of putting protections in
place. I think that we are strengthening these protections, as well as
protecting R&D and protecting our taxpayer dollars to make sure they
are being spent effectively and efficiently.
Mr. Speaker, I ask my colleagues to support S. 4900, and I yield back
the balance of my time.
Ms. VELAZQUEZ. Mr. Speaker, I yield myself the balance of my time for
closing.
The U.S. has the most dynamic small business ecosystem on the planet,
and this 3-year extension ensures that our country remains one of the
most innovative in the world.
The SBIR and STTR are essential components of that global
competitiveness. They give small businesses a role in developing
groundbreaking technologies that make our lives better in a variety of
ways.
This program boosts American security, innovation, and
entrepreneurship. That is why we must act today to extend them and
ensure our country continues to reap these benefits into the future.
Stakeholders, from individual small business owners to research
universities to the Department of Defense, have made it clear that even
a temporary shutdown would be disastrous.
Throughout these negotiations, we have not always seen eye to eye,
but I am thankful we all remain committed to keeping the programs open.
We have come up with a compromise that provides stability for small
businesses and the agencies they partner with, reduces the risk that
foreign adversaries can steal U.S. technologies developed through SBIR
and STTR, and preserves the competitive and merit-based strength of
these programs.
Mr. Speaker, this is not the end, and there will be more work to do
in the coming years. I pledge to continue to work to improve the
programs.
I, again, thank my colleagues involved with reauthorization for all
of their work leading up to today, including the members of the
Committee on Small Business who participated in many hearings and
briefings over the course of the past 2 years.
[[Page H8136]]
I also thank the staff on the House Committees on Small Business and
Science, Space, and Technology for their dedication and tireless work
to get us to this point: Dahlia Sokolov, Rebecca Callahan, Sara Barber,
Elizabeth Barczak, Catherine Johnson, Jenn Wickre, Giulia Leganski,
Robert Yavor, Delia Barr, Ellen Harrington, and Kevin Wheeler, who have
been living and breathing SBIR for most of their time on the Hill,
including this year as they worked around the clock, days, nights, and
weekends. I sincerely thank each of them.
Mr. Speaker, I ask my colleagues to vote ``yes'' on the SBIR and STTR
Extension Act of 2022 to provide stability and certainty to small firms
and agencies alike, and I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from New York (Ms. Velazquez) that the House suspend the
rules and pass the bill, S. 4900.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. GOOD of Virginia. Mr. Speaker, on that I demand the yeas and
nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.
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