Small Business Innovation Research Program Policy Directive, 1303-1309 [2013-31374]
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Federal Register
Vol. 79, No. 5
Wednesday, January 8, 2014
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SMALL BUSINESS ADMINISTRATION
13 CFR Chapter I
RIN 3245–AF84
Small Business Innovation Research
Program Policy Directive
Small Business Administration.
ACTION: Notice of amendments to final
policy directive.
AGENCY:
The U.S. Small Business
Administration (SBA) is amending its
Small Business Innovation Research
(SBIR) Program Policy Directive in
response to public comments SBA
received on the final SBIR Policy
Directive, published on August 6, 2012.
SBA is also making several minor
clarifying changes to ensure that the
SBIR participants clearly understand
certain program requirements.
DATES: These amendments to the SBIR
Policy Directive are effective January 8,
2014.
FOR FURTHER INFORMATION CONTACT:
Edsel Brown, Assistant Director, Office
of Innovation, at (202) 401–6365 or
technet@sba.gov.
SUPPLEMENTARY INFORMATION: On
December 31, 2011, the President signed
into law the National Defense
Authorization Act for Fiscal Year 2012
(Defense Reauthorization Act), Public
Law 112–81, 125–Stat. 1298. Section
5001, Division E of the Defense
Reauthorization Act contains the SBIR/
STTR Reauthorization Act of 2011
(Reauthorization Act), which amended
the Small Business Act and made
several amendments to the SBIR
Program. The Reauthorization Act
required SBA to issue amendments to
the SBIR Policy Directive and publish
the amendments in the Federal Register
within 180 days of when the
Reauthorization Act was passed.
On August 6, 2012, SBA published a
final SBIR Policy Directive
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SUMMARY:
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implementing the various provisions of
the Reauthorization Act at 77 FR 46806.
The directive made several key changes
to the SBIR Program relating to
eligibility, the SBIR award process, SBIR
Program administration, and fraud,
waste and abuse. Although the SBIR
Policy Directive is intended for use by
the SBIR participating agencies, SBA
believed that public input on the
directive from all parties involved in the
program would be invaluable.
Therefore, SBA sought public comments
on the final directive, and stated that it
may amend the directive in response to
these comments at a later time.
Response to Comments
In response to this request, SBA
received comments on various parts of
the directive. Several comments
recommended that SBA strengthen and
clarify the Policy Directive language
with regard to SBIR data rights and the
obligation of federal agencies to give a
preference in contracting to SBIR
awardees for follow-on Phase III work.
SBA agrees that these are areas of the
SBIR policy that are vital to the program
and require clarification and
improvement. SBA continues to
evaluate these issues and will address
them in a subsequent Policy Directive
revision.
SBA also received comments that the
definition of Essentially Equivalent
Work in section 3(j) of the Policy
Directive should be changed to be more
in line with the common usage. The
concern is that the definition in the
Policy Directive is more stringent than
the norm for Government contracting
and places a higher burden on the small
businesses participating in the SBIR
program. The commenter, however, did
not provide SBA with this commonly
used definition and SBA could not find
one. Therefore, SBA has not modified
the definition at this time. However,
SBA has revised the language in section
7(d) of the Directive to further clarify
funding of ‘‘essentially equivalent
work.’’
Section 4(a)(3) of the Policy Directive,
‘‘Agency benchmarks for progress
towards commercialization’’ sets forth
the program policy regarding an
eligibility requirement for Phase I
awards. SBA received comments
requesting clarification of the time
periods used to calculate the transition
rate and commercialization rate
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benchmark requirements. Commenters
also requested clarification about how
agencies determine which firms must
comply with the transition rate and
commercialization rate benchmarks. In
response to these comments, SBA
revised and reorganized section 4(a)(3)
to clarify several procedural elements
about the benchmark determinations
and enhance its readability.
Section 4(a)(3) clarifies the time
periods used to calculate awardee rates
of transition from Phase I to Phase II and
provides two examples of the
calculation. While the rate is calculated
using Phase I awards received in the
most recent 5,10, or 15-year period
(agencies choose which period they
use), excluding the most recently
completed fiscal year; the period used
when counting the Phase II awards is
lagged one year. That is, when
calculating the number of Phase I
awards received over a particular time
period, the time period evaluated does
not include the most recently completed
fiscal year; however, when calculating
the number of Phase II awards received,
the time period evaluated does include
the most recently completed fiscal year
but does not include the first year of the
period evaluated for Phase I awards
received. The period used to calculate
Phase II awards is lagged one-year
because it is unlikely that a new Phase
I would transition to a Phase II within
the same year. SBA also clarified that
the Phase II transition benchmark
requirement applies only to awardees
that have received more than 20 Phase
I awards over the applicable time period
and that the commercialization
benchmark applies only to firms that
received more than 15 Phase II awards
over the applicable time period.
Based on additional input from the
agencies participating in the SBIR
program, SBA also revised several
procedural elements of the Phase II
transition benchmark requirement in
section 4(a)(3) to simplify the process
for small businesses and reduce the
administrative burden on the agencies.
Specifically, in section 4(a)(3)(iii), SBA
changed the start date for the one-year
ineligibility period for firms that do not
meet the benchmarks. The date was
changed from the date of application
submission to June 1st of each year.
SBA made this change for several
reasons: (1) It is a clearly defined period
for affected small businesses; (2) to
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provide sufficient time for agencies to
enter fully verified award data from the
prior fiscal year into the TechNet
database; and (3) to eliminate the need
for agencies to track multiple periods of
ineligibility. SBA will use its TechNet
Data system to generate the list of
companies that do not meet agency
Phase II transition benchmarks and
provide this list to the agencies each
year on June 1. Finally, SBA also added
a procedure to notify awardee firms if
they are on the ineligible list and to
enable firms to provide feedback
directly to SBA if they believe their rate
was calculated using incomplete award
information.
Some respondents asked if the
provision in section 4(b)(5) allowing one
Sequential Phase II award included
supplementary awards such as Phase
2.5 or Phase IIb awards in the definition
of a Phase II award. SBA relocated the
language at section 4(b)(6) to new
section 4(b)(8) and added new section
4(b)(6) to clarify SBA’s policy on
supplemental phase II awards. Section
4(b)(6) now clarifies how Phase II award
amounts are calculated when
supplemental awards are issued.
Furthermore, section 4(b)(6) specifies
that all supplementary awards, such as
a Phase IIb, must be linked to either an
initial Phase II or a sequential Phase II
award and is added to the amount of
that award for the purpose of
determining the size of the Phase II
award. This means that all
supplementary Phase II awards
including options, enhancements,
administrative supplements, and Phase
IIb-type programs are considered as part
of the initial Phase II or sequential
Phase II from which they derive and are
therefore subject to the Phase II peraward guideline amount of $1 million
and limit of $1.5 million.
SBA repeated the language in section
9(d)(2) in new section 4(b)(7), which
explains how a Phase I awardee may
receive an award from one agency and
also may receive a subsequent Phase II
award from another agency. SBA also
clarified in section 4(b)(7) that the same
process applies to a second, sequential
Phase II award that follows an initial
Phase II award from a different agency.
This policy is relevant to interagency
actions, which are found at section 9 of
the Policy Directive, and also to Phase
II awards, which is found at section 4
of the Policy Directive.
SBA received comments concerning
section 9 of the Policy Directive, which
address measures to prevent fraud,
waste and abuse in the program. The
respondents commented that the
administrative requirements contained
in section 9 may be too stringent and
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may discourage small businesses from
applying. SBA notes that it developed
these requirements, including the
procedures and requirements for
certification, in consultation with the
Council of Inspectors General on
Integrity and Efficiency. SBA believes
that these provisions can help reduce
fraud, waste and abuse in the program
and does not think these provisions
should be changed at this time.
SBA received comments on the
Department of Defense’s (DoD’s)
Commercialization Readiness Program,
outlined in section 12(b) of the SBIR
Policy Directive. In response to
comments that agency efforts to increase
transitions to Phase III could reduce the
innovative nature of SBIR awards, SBA
has added that when DoD reports on its
Phase II insertion incentives, it should
note efforts to ensure that such
incentives do not act to shift the focus
of SBIR Phase II awards away from
relatively high-risk innovation projects.
SBA also amended the provisions
relating to the use of SBIR funds for the
DoD Commercialization Readiness
Program. According to section 1615 of
the National Defense Authorization Act
for Fiscal Year 2013 (NDAA), Public
Law 112–239, 126 Stat. 1632, DoD has
the authority to use 1% of its SBIR
funding for purposes of administering
the Commercialization Readiness
Program.
A number of comments asked us to
change features that, because they are
required by statute, we were not able to
modify.
Miscellaneous Changes
The inadvertent omission of the term
‘‘extramural’’ before ‘‘R/R&D budgets’’
was corrected in section 2(b), which
identifies the source of funds for the
program.
Section 3 contains definitions of
terms that appear throughout the Policy
Directive. SBA made an editorial
revision to the definition of ‘‘Awardee’’
in section 3(e). SBA revised the word
‘‘receiving’’ to ‘‘that receives.’’
Section 4(b)(1), which identifies the
objective and nature of a Phase II award,
includes a statement regarding the
eligibility of successor in interest firms
for SBIR awards. Because this statement
pertains more generally to eligibility for
all SBIR awards, it was removed from
section 4(b)(1) and added to section 6(a)
which addresses program eligibility
requirements.
In Section 6, SBA removed the
reference to the STTR program
regarding the option to make awards to
small businesses that are majority
owned by multiple venture capital
operating companies, hedge funds or
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private equity firms. When SBA issued
its final size regulations on December
27, 2012 (77 FR 76215), it reviewed this
issue and determined that such
businesses may not participate in the
STTR program. Additionally, SBA
added the language previously found at
section 4(b)(1) regarding successor in
interest firms to section 6(a)(5), because
section 6(a) addresses general program
eligibility. Sections 6(a)(2) through
6(a)(6) were reorganized and
renumbered in order to increase
readability.
Section 7 addresses issues related to
program funding processes. SBA revised
the language in paragraph 7(d) to clarify
that while duplicate or similar
proposals may be submitted in response
to apparently similar solicitation topics,
essentially equivalent work may not be
funded. In addition, SBA revised
paragraph (h)(1), which says that
funding agreement modifications should
be kept to a minimum, to address only
modifications that increase the dollar
amount of awards. Paragraph (h)(1) also
referred to modifications of periods of
performance and scope of work. SBA
clarified section 7(h)(1) to specify that
the concern regarding the number of
modifications made to an award
pertains only to changes that increase
the dollar amount of awards.
Section 8 of the Directive addresses
the terms of agreement under SBIR
awards. SBA clarified section 8(a) by
removing language stating that agencies
should discourage SBCs from
submitting proprietary information and
revised section 8(d) to clarify that the
continued use of agency-owned
property applies to property acquired by
the awardee under the contract.
In response to concerns regarding the
cost and accountability of the
continuing study by the National
Academy of Sciences, SBA modified
section 9(h) to clarify that the agreement
required between the agencies and the
National Academy of Sciences must be
made in consultation with the SBA and
must comprehensively address the
scope and content of the work to be
performed.
Section 10(h) explains the process for
agencies to submit their SBIR program
annual reports to SBA. Paragraph (h)(4)
contains a list of information that must
be included in each agency’s annual
report. SBA clarified section 10(h)(4)(xi)
to note that agencies must report all
instances in which an agency pursued
R/R&D, services, production, or any
combination thereof of a technology
developed under an SBIR award with an
entity other than that SBIR awardee.
Section 10(j) contains information on
the other reporting requirements for
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SBIR participating agencies. Section
10(j)(2) discusses a system that will list
any individual or small business
concern that received an SBIR award
and that has been convicted of a fraudrelated crime involving SBIR funds or
found civilly liable for a fraud-related
violation involving SBIR funds. SBA
clarified this section to note that SBA
will list those individuals and small
business concerns of which SBA has
been made aware.
Section 12(b) addresses the
Commercialization Readiness Program
at the Department of Defense (DoD).
SBA clarified the source of funding for
this program by removing the sentence
in paragraph (b)(4)(ii) stating that funds
for the program would come from the
3% administrative set-aside, and by
clarifying that the funds shall not be
subject to the limitations on the use of
funds in section 9(e)(3). In addition, in
section 12(b)(6)(iii)(C), SBA clarified
that the DoD must include, along with
its description of the incentives used for
this program, information on measures
taken to ensure that such incentives do
not shift the focus of the SBIR Phase II
awards away from the relatively highrisk innovation projects they are
intended to promote.
Section 12(b)(5) addresses DoD’s
Commercialization Readiness Program.
The Policy Directive states that DoD
may establish transition goals and
reporting requirements for awards less
than $1,000,000,000. The amount listed
in section 12(b)(5) contained a
typographical error, which was
corrected to $100,000,000.
Appendix I provides instructions for
the preparation of program solicitations.
In Appendix I, SBA revised the
certification check box regarding
notification if work is subsequently
funded by another Federal agency to
clarify that it pertains to work funded
and completed under the award rather
than to the work proposed for the
award.
The updated SBIR Policy Directive,
incorporating all changes noted here,
will be posted on www.sbir.gov.
Notice of Amendments to Final Policy
Directive; Small Business Innovation
Research Program
To: The Small Business Innovation
Research Program Managers.
Subject: Amendments to SBIR Policy
Directive Published on August 6, 2012
at 77 FR 46806.
1. Purpose. The purpose of this notice
is to inform SBIR agencies of
amendments made to the recently
published SBIR Policy Directive.
2. Authority. Section 9(j)(3) of the
Small Business Act (15 U.S.C. 638(j))
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requires the Administrator of the U.S.
Small Business Administration (SBA) to
issue an SBIR Program Policy Directive
for the general conduct of the SBIR
Program.
3. Procurement Regulations. It is
recognized that the Federal Acquisition
Regulations and agency supplemental
regulations may need to be modified to
conform to the requirements of the final
Policy Directive. SBA’s Administrator or
designee must review and concur with
any regulatory provisions that pertain to
areas of SBA responsibility. SBA’s
Office of Innovation coordinates such
regulatory actions.
4. Personnel Concerned. This Policy
Directive serves as guidance for all
federal government personnel who are
involved in the administration of the
SBIR Program, issuance and
management of Funding Agreements or
contracts pursuant to the SBIR Program,
and the establishment of goals for small
business concerns in research or
research and development acquisition
or grants.
5. Originator. SBA’s Office of
Innovation and Technology.
6. Date. The policy directive is
effective on January 8, 2014.
Authorized by:
Dated: December 26, 2013.
Pravina Raghavan,
Deputy Associate Administrator, Office of
Investment and Innovation Small Business
Administration.
Dated: December 26, 2013.
Jeanne Hulit,
Acting Administrator.
SBA amends the SBIR Policy
Directive as follows:
1. Amend section 2(b) by adding the
term ‘‘extramural’’ before ‘‘R/R&D
budgets’’ each place it appears.
2. Revise section 3(e) to read as
follows:
(e) Awardee. The organizational entity
that receives an SBIR Phase I, Phase II,
or Phase III award.
3. Revise section 4(a)(3) to read as
follows:
(3) Agency benchmarks for progress
towards commercialization. Each
agency must determine whether an
applicant for a Phase I award that has
won multiple prior SBIR awards meets
the agency’s benchmark requirements
for progress towards commercialization
before making a new Phase I award to
that applicant. For the purpose of this
requirement, applicants are assessed
using their prior Phase I and Phase II
SBIR and STTR awards across all SBIR
agencies.
(i) Agencies must apply two
benchmark rates addressing an
applicant’s progress towards
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commercialization—the Phase II
Transition Rate Benchmark and the
Commercialization Rate Benchmark.
(A) The Phase II Transition Rate
Benchmark sets the minimum required
number of Phase II awards the applicant
must have received for a given number
of Phase I awards received during the
specified period. This Transition Rate
Benchmark applies only to Phase I
applicants that have received more than
20 Phase I awards over the time period
used by the agency for the benchmark
determination.
(B) The agency Commercialization
Rate Benchmark sets the minimum
Phase III commercialization results that
a Phase I applicant must have realized
from its prior Phase II awards in order
to be eligible to receive a new Phase I
award from that agency. This
benchmark requirement applies only to
Phase I applicants that have received
more than 15 Phase II awards over the
time period used by the agency for the
benchmark determination.
(ii) Consequence. If an awardee fails
to meet either of the benchmarks, that
awardee is not eligible for an SBIR
Phase I award (and any Phase II award
issued pursuant to paragraph (b)(1)(ii)
below) for a period of one year from the
time of the determination.
(iii) Timing of the determination and
consequence period. The SBIR awardee
Phase II transition rates and
commercialization rates are calculated
using the data in SBA’s TechNet
database. For the purpose of these
benchmark requirements, awardee firms
are assessed once a year, on June 1st,
using their prior SBIR and STTR awards
across all agencies. SBA makes this
tabulation of awardee transition rates
and commercialization rates available to
the agencies. Each SBIR agency uses this
tabulation to determine which
companies do not meet that agency’s
benchmark rates and are therefore
ineligible to receive new Phase 1 awards
from that agency during the one-year
period beginning on June 1st and ending
on May 31st. SBA notifies these
ineligible firms of the determination and
the one year restriction on Phase I
awards. Agencies must notify SBA of
any applications denied because of the
failure to meet the benchmarks.
(iv) Phase II Transition Rate
Benchmark. Each agency must establish
an SBA-approved Phase II Transition
Rate Benchmark and applicable time
period. The benchmark rates and time
periods are posted at www.sbir.gov.
Agencies must seek approval for any
subsequent changes from SBA.
(A) The agency Phase II Transition
Rate Benchmark establishes the number
of Phase II awards a small business
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concern must have received for a given
number of Phase I awards received over
the past 5, 10 or 15 fiscal years,
excluding the most recently completed
fiscal year. Each agency selects both the
rate to be applied and the length of time
that the agency will use to evaluate
whether a small business concern has
met the Transition Rate Benchmark. The
period over which Phase I awards are
counted excludes the most recently
completed fiscal year. The time period
over which Phase II awards are counted
includes the most recently completed
fiscal year and excludes the first year of
the time period evaluated for Phase I
awards.
Example: On August 1, 2014, an SBC
submits an application to an agency using a
Transition Rate Benchmark of 0.25 and a 5year time period. The June 1, 2014 TechNet
Company Registry tabulation shows that the
SBC received 24 Phase I awards during
FY08–FY12. Since this SBC has received 20
or more Phase I awards during the 5-year
period, the SBC is required to meet the
Transition Rate Benchmark. The SBC
received 8 Phase II awards in FY09–FY13
and therefore has a 5-year Phase II transition
rate of 8/24 or 0.33 (# of Phase II awards in
FY09–FY13/# of Phase I awards in FY08–
FY12). Because the SBC meets or exceeds the
agency Transition Rate Benchmark, it is
considered for award through the usual
proposal evaluation process.
Example 2: On September 1, 2014, an SBC
is interested in applying for a Phase I award,
knows it has received a number of Phase I
awards in recent years, but is unsure if it is
meeting the required Phase II transition rate.
The company official logs onto the Company
Registry at SBIR.gov to check its status and
sees a flag saying it did not meet the required
benchmark transition rate of 0.25 on June 1,
2014 and is therefore ineligible for a Phase
I award through May 31, 2015. The company
checks its records and sees that it received
30 Phase I awards during FY08–FY12 and 6
Phase II awards during FY09–FY13. Its
transition rate is therefore 6/30 or 0.20 which
is under the required rate of 0.25. The SBC
does not apply for a new Phase I award
through May 31, 2015 because it knows its
application would be rejected.
Example 3: On September 1, 2014, an SBC
official interested in applying for a Phase I
award logs onto the Company Registry at
SBIR.gov and sees the flag saying it did not
meet the required benchmark transition rate
of 0.25 on June 1, 2014 and is not eligible for
a Phase I award through May 31, 2015.
However, when the company checks its own
records, it sees that it received 8 Phase II
awards during FY09–FY13, not the 6 awards
showing on the Web site. Its transition rate
is therefore 8/30 or 0.26 which is above the
required rate of 0.25. The company official
therefore goes to SBIR.gov, clicks on the
‘‘Dispute Transition Rate’’ button, and enters
the information about the discrepancy. SBA
uses the information provided by the
company and, working with the relevant
agencies, identifies that two Phase II awards
from FY09 had been inadvertently omitted.
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SBA updates and corrects the database and
informs the firm that it is indeed eligible to
receive SBIR Phase I awards.
(B) An SBC that has received more
than 20 Phase I awards in the relevant
time period can view its Phase II
transition rate on the Company Registry
page at SBIR.gov. Generally, the award
data used to calculate an SBC’s
transition rate will be complete by the
end of March each year. An SBC may
view its SBIR/STTR award information
on the Company Registry at any time. If
an awardee believes its Phase II
transition rate is calculated using
incomplete award information, the
awardee may dispute the rate using the
link provided on the Company Registry,
provide the additional award
information, and request a
reconsideration of its transition rate.
Requests for reconsideration of a firm’s
transition rate received by SBA from
April 1st through April 30th of each
year will be considered for the June 1st
transition rate assessment.
(C) Agencies must set the Phase II
Transition Rate Benchmark as
appropriate for their programs and
industry sectors. When setting the
Transition Rate Benchmark, agencies
should consider that Phase I is designed
and intended to explore high-risk, earlystage research ideas and, as a result, not
all Phase I awards are expected to result
in a Phase II award.
(v) Commercialization Rate
Benchmark. By October 1, 2013, each
agency will establish an SBA-approved
Commercialization Rate Benchmark that
establishes the level of Phase III
commercialization results an SBC must
have received from work it performed
under prior Phase II awards, over the
prior 5, 10 or 15 fiscal years, excluding
the most recently completed two fiscal
years. Agencies may define this
benchmark:
(A) in financial terms, such as by
using the ratio of the dollar value of
revenues and additional investment
resulting from prior Phase II awards
relative to the dollar value of the Phase
II awards received over the time period;
(B) in terms of the share of Phase II
awards received over the time period
that have resulted in the introduction of
a product to market; or
(C) by other means such as using a
commercialization scoring system that
rates awardees on their past
commercialization success.
(vi) Agencies must submit their
Transition Rate Benchmark,
Commercialization Rate Benchmark,
and time periods to SBA for approval.
SBA will publish the benchmarks and
time periods, seek public comment, and
maintain a table of the current
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requirements on www.sbir.gov. The
benchmarks and time periods become
effective when SBA posts the approved
measures on www.sbir.gov. Agencies
must submit any changes to the
benchmarks or time periods to SBA for
prior approval.
(vii) SBA maintains a system that
records all Phase I, Phase II and
Government Phase III awards, and other
commercialization information; and
calculates the Phase II transition rates
for all Phase I awardees and the
commercialization rates for all Phase II
awardees.
(viii) If an applicant fails to meet an
agency’s benchmark, its name will
appear on the list of companies made
available to the agencies on June 1 of
each year. An agency may not make a
Phase I award to an applicant that does
not meet the agency’s benchmark.
(ix) If an awardee believes its
determination was made in error, it may
provide SBA with the pertinent award
information and request a reassessment.
To do so, awardees may use the link on
the Company Registry at www.sbir.gov.
4. Amend section 4(b) by revising
paragraph (b)(1) by moving language to
6(a)(4), renumbering paragraph (b)(6) as
(b)(8), and inserting paragraphs (b)(6)
and (b)(7) to read as follows:
(b) Phase II.
(1) The object of Phase II is to
continue the R/R&D effort from the
completed Phase I. Unless an exception
set forth in paragraphs (i) or (ii) below
applies, only SBIR Phase I awardees are
eligible to participate in Phase II.
(i) A Federal agency may issue an
SBIR Phase II award to an STTR Phase
I awardee to further develop the work
performed under the STTR Phase I
award. The agency must base its
decision upon the results of work
performed under the Phase I award and
the scientific and technical merit, and
commercial potential of the Phase II
proposal. The STTR Phase I awardee
must meet the eligibility and program
requirements of the SBIR Program in
order to receive the SBIR Phase II
award.
(ii) During fiscal years (FY) 2012
through 2017, the National Institutes of
Health (NIH), Department of Defense
(DoD) and the Department of Education
(DoEd) may issue a Phase II award to a
small business concern that did not
receive a Phase I award for that R/R&D.
Prior to such an award, the heads of
those agencies, or designees, must issue
a written determination that the small
business has demonstrated the scientific
and technical merit and feasibility of the
ideas that appear to have commercial
potential. The determination must be
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submitted to SBA prior to issuing the
Phase II award.
. . . [paragraphs (2) through (4) are
unchanged] . . .
(5) A Phase II awardee may receive
one additional, sequential Phase II
award to continue the work of an initial
Phase II award. The additional,
sequential Phase II award has the same
guideline amounts and limits as an
initial Phase II award.
(6) Agencies may offer special SBIR
awards, such as Phase IIB awards, that
supplement or extend Phase II awards.
For example, some agencies administer
Phase IIB awards that differ from the
base Phase II in that they require third
party matching of the SBIR funds. Each
such supplemental award must be
linked to a base Phase II award (the
initial Phase II, or the second sequential
Phase II award). Any SBIR funds used
for such special or supplementary
awards are aggregated with the amount
of the base Phase II to determine the size
of that Phase II award. Therefore, while
there is no limit on the number of such
special/supplementary awards, there is
a limit on the total amount of SBIR
funds that can be administered through
them—the amounts of these awards
count towards the size of the initial
Phase II or the sequential Phase II, each
of which has a guideline amount of $1
million and a limit of $1.5 million.
(Note that Phase IIB awards under the
NIH SBIR program are administered as
second, sequential Phase II awards, not
supplemental awards. As such, they are
base Phase II awards and subject to the
Phase II guideline amounts and limits of
$1 million and $1.5 million).
(7) A concern that has received a
Phase I award from an agency may
receive a subsequent Phase II award
from another agency if each agency
makes a written determination that the
topics of the relevant awards are the
same and both agencies report the
awards to the SBA including a reference
to the related Phase I award and initial
Phase II award if applicable.
(8) Agencies may issue Phase II
awards for testing and evaluation of
products, services, or technologies for
use in technical or weapons systems.
5. Revise section 6(a)(2) through
§ 6(a)(6)to read as follows:
(2) For Phase I, a minimum of twothirds of the research or analytical effort
must be performed by the awardee. For
Phase II, a minimum of one-half of the
research or analytical effort must be
performed by the awardee.
Occasionally, deviations from these
requirements may occur, and must be
approved in writing by the funding
agreement officer after consultation with
the agency SBIR Program Manager/
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Coordinator. An agency can measure
this research or analytical effort using
the total contract dollars or labor hours,
and must explain to the small business
in the solicitation how it will be
measured.
(3) For both Phase I and Phase II, the
primary employment of the principal
investigator must be with the SBC at the
time of award and during the conduct
of the proposed project. Primary
employment means that more than onehalf of the principal investigator’s time
is spent in the employ of the SBC. This
precludes full-time employment with
another organization. Occasionally,
deviations from this requirement may
occur, and must be approved in writing
by the funding agreement officer after
consultation with the agency SBIR
Program Manager/Coordinator. Further,
an SBC may replace the principal
investigator on an SBIR Phase I or Phase
II award, subject to approval in writing
by the funding agreement officer. For
purposes of the SBIR Program,
personnel obtained through a
Professional Employer Organization or
other similar personnel leasing
company may be considered employees
of the awardee. This is consistent with
SBA’s size regulations, 13 CFR
121.106—Small Business Size
Regulations.
(4) For both Phase I and Phase II, the
R/R&D work must be performed in the
United States. However, based on a rare
and unique circumstance, agencies may
approve a particular portion of the R/
R&D work to be performed or obtained
in a country outside of the United
States, for example, if a supply or
material or other item or project
requirement is not available in the
United States. The funding agreement
officer must approve each such specific
condition in writing.
(5) An SBIR awardee may include,
and SBIR work may be performed by,
those identified via a ‘‘novated’’ or
‘‘successor in interest’’ or similarlyrevised funding agreement, or those that
have reorganized with the same key
staff, regardless of whether they have
been assigned a different tax
identification number. Agencies may
require the original awardee to
relinquish its rights and interests in an
SBIR project in favor of another
applicant as a condition for that
applicant’s eligibility to participate in
the SBIR Program for that project.
(6) NIH, Department of Energy and
National Science Foundation may
award not more than 25% of the
agency’s SBIR funds to SBCs that are
owned in majority part by multiple
venture capital operating companies,
hedge funds, or private equity firms
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1307
through competitive, merit-based
procedures that are open to all eligible
small business concerns. All other SBIR
agencies may award not more than 15%
of the agency’s SBIR funds to such
SBCs. SBIR agencies may or may not
choose to utilize this funding option. A
table listing the agencies that are
currently using this authority can be
found at www.SBIR.gov. This authority
is set forth in 13 CFR 121.701 through
121.705.
(i) Before permitting participation in
the SBIR program by SBCs that are
owned in majority part by multiple
venture capital operating companies,
hedge funds, or private equity firms, the
SBIR agency must submit a written
determination to SBA, the Senate
Committee on Small Business and
Entrepreneurship, the House Committee
on Small Business and the House
Committee on Science, Space, and
Technology at least 30 calendar days
before it begins making awards to such
SBCs. The determination must be made
by the head of the Federal agency or
designee and explain how awards to
such SBCs in the SBIR program will:
(A) induce additional venture capital,
hedge fund, or private equity firm
funding of small business innovations;
(B) substantially contribute to the
mission of the Federal agency;
(C) address a demonstrated need for
public research; and
(D) otherwise fulfill the capital needs
of small business concerns for
additional financing for SBIR projects.
(ii) The SBC that is majority-owned by
multiple venture capital operating
companies, hedge funds, or private
equity firms must register with SBA in
the Company Registry Database, at
www.SBIR.gov, prior to the date it
submits an application for an SBIR
award.
(iii) The SBC that is majority-owned
by multiple venture capital operating
companies, hedge funds, or private
equity firms must submit a certification
with its proposal stating, among other
things, that it has registered with SBA.
(iv) Any agency that makes an award
under this paragraph during a fiscal year
shall collect and submit to SBA data
relating to the number and dollar
amount of Phase I awards, Phase II
awards, and any other category of
awards by the Federal agency under the
SBIR program during that fiscal year.
See section10 of this directive for the
specific reporting requirements.
(v) If an agency awards more than the
percentage of the funds authorized
under section 6(a)(2) of the Policy
Directive, the agency shall transfer from
its non-SBIR and non-STTR R&D funds
to the agency’s SBIR funds any amount
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Federal Register / Vol. 79, No. 5 / Wednesday, January 8, 2014 / Rules and Regulations
that is in excess of the authorized
amount. The agency must transfer the
funds not later than 180 days after the
date on which the Federal agency made
the award that exceeded the authorized
amount.
(vi) If a Federal agency makes an
award under a solicitation more than 9
months after the date on which the
period for submitting applications
under the solicitation ends, a Covered
Small Business Concern is eligible to
receive the award, without regard to
whether it meets the eligibility
requirements of the program for a SBC
that is majority-owned by multiple
venture capital operating companies,
hedge funds, or private equity firms, if
the Covered Small Business Concern
meets all other requirements for such an
award. In addition, the agency must
transfer from its non-SBIR and nonSTTR R&D funds to the agency’s SBIR
funds any amount that is so awarded to
a Covered Small Business Concern. The
funds must be transferred not later than
90 days after the date on which the
Federal agency makes the award.
6. Revise section 7(d) to read as
follows:
(d) Essentially Equivalent Work. SBIR
participants often submit duplicate or
similar proposals to more than one
soliciting agency when the
announcement or solicitation appears to
involve similar topics or requirements.
However, ‘‘essentially equivalent work’’
must not be funded in the SBIR or other
Federal programs, unless an exception
to this rule applies. Agencies must
verify with the applicant that this is the
case by requiring them to certify at the
time of award and during the lifecycle
of the award that they do not have
essentially equivalent work funded by
another Federal agency.
7. Revise section 7(h)(1) to read as
follows:
(h) Periods of Performance and
Extensions.
(1) In keeping with the legislative
intent to make a large number of
relatively small awards, modification of
funding agreements to increase the
dollar amount should be kept to a
minimum, except for options in original
Phase I or II awards.
8. Revise section 8(a) to read as
follows:
(a) Proprietary Information Contained
in Proposals. The standardized SBIR
Program solicitation will include
provisions requiring the confidential
treatment of any proprietary information
to the extent permitted by law. The
solicitation will require that all
proprietary information be identified
clearly and marked with a prescribed
legend. Agencies may elect to require
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SBCs to limit proprietary information to
that essential to the proposal and to
have such information submitted on a
separate page or pages keyed to the text.
The Government, except for proposal
review purposes, protects all proprietary
information, regardless of type,
submitted in a contract proposal or
grant application for a funding
agreement under the SBIR Program,
from disclosure.
9. Revise section 8(d) to read as
follows:
(d) Continued Use of Government
Equipment. Agencies must allow an
SBIR awardee participating in the third
phase of the SBIR Program continued
use, as a directed bailment, of any
property transferred by the agency to the
Phase II awardee or acquired by the
awardee for the purpose of fulfilling the
contract. The Phase II awardee may use
the property for a period of not less than
2 years, beginning on the initial date of
the concern’s participation in the third
phase of the SBIR Program.
10. Revise section 9(h) to read as
follows:
(h) National Academy of Sciences
Report. The National Academy of
Sciences (NAS) will conduct a study
and issue reports on the SBIR and STTR
programs.
(1) Prior to and during the period of
study, and to ensure that the concerns
of small business are appropriately
considered, NAS shall consult with and
consider the views of SBA’s Office of
Investment and Innovation and the
Office of Advocacy and other interested
parties, including entities,
organizations, and individuals actively
engaged in enhancing or developing the
technological capabilities of small
business concerns.
(2) The head of each agency with a
budget of more than $50,000,000 for its
SBIR Program for fiscal year 1999 shall,
in consultation with SBA, and not later
than 6 months after December 31, 2011,
cooperatively enter into an agreement
with NAS regarding the content and
performance of the study. SBA and the
agencies will work with the Interagency
Policy Committee in determining the
parameters of the study, including the
specific areas of focus and priorities for
the broad topics required by statute. The
agreement with NAS must set forth
these parameters, specific areas of focus
and priorities, and comprehensively
address the scope and content of the
work to be performed. This agreement
must also require the NAS to ensure
there is participation by and
consultation with, the small business
community, the SBA, and other
interested parties as described in
paragraph (1).
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(3) NAS shall transmit to SBA, heads
of agencies entering into an agreement
under this section, the Committee on
Science, Space and Technology, the
Committee on Small Business of the
House of Representatives, and to the
Committee on Small Business of the
Senate a copy of the report, which
includes the results and
recommendations, not later than 4 years
after December 31, 2011, and every
subsequent four years.
11. Revise section 10(h)(4)(xi) to read
as follows:
(xi) All instances in which an agency
pursued R/R&D, services, production, or
any combination thereof of a technology
developed under an SBIR award with an
entity other than that SBIR awardee. See
section 9(a)(12) for minimum reporting
requirements.
12. Revise section 10(j)(2) to read as
follows:
(2) The system will include a list of
any individual or small business
concern that has received an SBIR
award and that has been convicted of a
fraud-related crime involving SBIR
funds or found civilly liable for a fraudrelated violation involving SBIR funds,
of which SBA has been made aware.
13. Revise section 12(b)(4) to read as
follows:
(4) Funding.
(i) Beginning with FY 2013 and
ending in FY 2015, the Secretary of
Defense and each Secretary of a military
department is authorized to use its SBIR
funds for administration of this program
in accordance with the procedures and
policies set forth in section 9(e)(3) of
this directive.
(ii) In addition, the Secretary of
Defense and Secretary of each military
department is authorized to use not
more than an amount equal to 1% of its
SBIR funds available to DoD or the
military departments for payment of
expenses incurred to administer the
Commercialization Program. Such
funds—
(A) shall not be subject to the
limitations on the use of funds in 9(e)(2)
or 9(e)(3) of this directive; and
(B) shall not be used to make Phase
III awards.
14. Revise section 12(b)(5) to read as
follows:
(5) Contracts Valued at less than
$100,000,000. For any contract awarded
by DoD valued at less than
$100,000,000, the Secretary of Defense
may:
(i) establish goals for the transition of
Phase III technologies in subcontracting
plans; and
(ii) require a prime contractor on such
a contract to report the number and
dollar amount of the contracts entered
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into by the prime contractor for Phase
III SBIR projects.
15. Revise section 12(b)(6) to read as
follows:
(6) The Secretary of Defense shall:
(i) set a goal to increase the number
of SBIR Phase II contracts that lead to
technology transition into programs of
record of fielded systems;
(ii) use incentives in effect as of
December 31, 2011 or create new
incentives to encourage agency program
managers and prime contractors to meet
the goal set forth in paragraph (6)(i)
above; and
(iii) submit the following to SBA, as
part of the annual report:
(A) the number and percentage of
Phase II SBIR contracts awarded by DoD
that led to technology transition into
programs of record or fielded systems;
(B) information on the status of each
project that received funding through
the Commercialization Program and the
efforts to transition these projects into
programs of record or fielded systems;
and
(C) a description of each incentive
that has been used by DoD, the
effectiveness of the incentive with
respect to meeting DoD’s goal to
increase the number of SBIR Phase II
contracts that lead to technology
transition into programs of record of
fielded systems, and measures taken to
ensure that such incentives do not act
to shift the focus of SBIR Phase II
awards away from relatively high-risk
innovation projects.
16. Revise paragraph 1(a) of the
Appendix I: Instructions for Preparation
of SBIR Program Solicitation to read as
follows:
(a) Summarize in narrative form the
request for proposals and the objectives
of the SBIR Program.
17. In Appendix I, in the SBIR
Funding Agreement Certification and
the SBIR Funding Agreement
Certification—Life Cycle Certification,
revise the checkbox addressing potential
duplicative funding to read as follows:
It will notify the Federal agency
immediately if all or a portion of the
work authorized and funded under this
award is subsequently funded by
another Federal agency.
[FR Doc. 2013–31374 Filed 1–7–14; 8:45 am]
BILLING CODE 8025–01–P
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SMALL BUSINESS ADMINISTRATION
13 CFR Chapter I
RIN 3245–AF45
Small Business Technology Transfer
Program Policy Directive
Small Business Administration.
Notice of amendments to final
policy directive.
AGENCY:
ACTION:
The U.S. Small Business
Administration (SBA) is amending its
Small Business Technology Transfer
(STTR) Program Policy Directive in
response to public comments SBA
received on the final STTR and Small
Business Innovation Research (SBIR)
Policy Directives, published on August
6, 2012. SBA is also making several
minor clarifying changes to ensure that
the STTR participants clearly
understand certain program
requirements. Additionally, the changes
to the STTR Policy Directive are made
to maintain concordance with the SBIR
program.
DATES: These amendments to the STTR
Policy Directive are effective January 8,
2014.
FOR FURTHER INFORMATION CONTACT:
Edsel Brown, Assistant Director, Office
of Innovation, at (202) 401–6365 or
technet@sba.gov.
SUPPLEMENTARY INFORMATION: On
December 31, 2011, the President signed
into law the National Defense
Authorization Act for Fiscal Year 2012
(Defense Reauthorization Act), Public
Law 112–81, 125–Stat. 1298. Section
5001, Division E of the Defense
Reauthorization Act contains the SBIR/
STTR Reauthorization Act of 2011
(Reauthorization Act), which amended
the Small Business Act and made
several amendments to the STTR
Program. The Reauthorization Act
required SBA to issue amendments to
the STTR Policy Directive and publish
the amendments in the Federal Register
within 180 days of when the
Reauthorization Act was passed.
On August 6, 2012, SBA published a
final STTR Policy Directive
implementing the various provisions of
the Reauthorization Act at 77 FR 46855.
The directive made several key changes
to the STTR Program relating to
eligibility, the award process, program
administration, and fraud, waste and
abuse. Although the STTR Policy
Directive is intended for use by the
STTR participating agencies, SBA
believed that public input on the
directive from all parties involved in the
program would be invaluable.
Therefore, SBA sought public comments
SUMMARY:
PO 00000
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1309
on the final directive, and stated that it
may amend the directive in response to
these comments at a later time.
Response to Comments
In response to this request, SBA
received comments on various parts of
the directive. If SBA received comments
on a section of the SBIR Policy Directive
that also appears in the STTR Policy
Directive, SBA clarified the relevant
sections in both the SBIR and STTR
Policy Directives, when appropriate, in
order to maintain concordance between
the programs. Several comments
recommended that SBA strengthen and
clarify the Policy Directive language
with regard to SBIR/STTR data rights
and the obligation of federal agencies to
give a preference in contracting to SBIR/
STTR awardees for follow-on Phase III
work. SBA agrees that these areas of
SBIR/STTR policy are vital to the
programs and require clarification and
improvement. The SBA continues to
evaluate these issues and will address
them in a subsequent Policy Directive
revision.
Section 4(a)(3) ‘‘Agency benchmarks
for progress towards
commercialization’’ sets forth the
program policy regarding an eligibility
requirement for Phase I awards. SBA
received comments requesting
clarification of the time periods used to
calculate the transition rate and
commercialization rate benchmark
requirements. Commenters also
requested clarification about how
agencies determine which firms must
comply with the transition rate and
commercialization rate benchmarks. In
response to these comments, SBA
revised and reorganized section 4(a)(3)
to clarify several procedural elements
about the benchmark determinations
and enhance its readability.
Section 4(a)(3) clarifies the time
periods used to calculate awardee rates
of transition from Phase I to Phase II and
provides two examples of the
calculation. While the rate is calculated
using Phase I awards received in the
most recent 5, 10, or 15-year period
(agencies choose which period they
use), excluding the most recently
completed fiscal year; the period used
when counting the Phase II awards is
lagged one year. That is, when
calculating the number of Phase I
awards received over a particular time
period, the time period evaluated does
not include the most recently completed
fiscal year; however, when calculating
the number of Phase II awards received,
the time period evaluated does include
the most recently completed fiscal year
but does not include the first year of the
period evaluated for Phase I awards
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Agencies
[Federal Register Volume 79, Number 5 (Wednesday, January 8, 2014)]
[Rules and Regulations]
[Pages 1303-1309]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-31374]
========================================================================
Rules and Regulations
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains regulatory documents
having general applicability and legal effect, most of which are keyed
to and codified in the Code of Federal Regulations, which is published
under 50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by the Superintendent of Documents.
Prices of new books are listed in the first FEDERAL REGISTER issue of each
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========================================================================
Federal Register / Vol. 79, No. 5 / Wednesday, January 8, 2014 /
Rules and Regulations
[[Page 1303]]
SMALL BUSINESS ADMINISTRATION
13 CFR Chapter I
RIN 3245-AF84
Small Business Innovation Research Program Policy Directive
AGENCY: Small Business Administration.
ACTION: Notice of amendments to final policy directive.
-----------------------------------------------------------------------
SUMMARY: The U.S. Small Business Administration (SBA) is amending its
Small Business Innovation Research (SBIR) Program Policy Directive in
response to public comments SBA received on the final SBIR Policy
Directive, published on August 6, 2012. SBA is also making several
minor clarifying changes to ensure that the SBIR participants clearly
understand certain program requirements.
DATES: These amendments to the SBIR Policy Directive are effective
January 8, 2014.
FOR FURTHER INFORMATION CONTACT: Edsel Brown, Assistant Director,
Office of Innovation, at (202) 401-6365 or technet@sba.gov.
SUPPLEMENTARY INFORMATION: On December 31, 2011, the President signed
into law the National Defense Authorization Act for Fiscal Year 2012
(Defense Reauthorization Act), Public Law 112-81, 125-Stat. 1298.
Section 5001, Division E of the Defense Reauthorization Act contains
the SBIR/STTR Reauthorization Act of 2011 (Reauthorization Act), which
amended the Small Business Act and made several amendments to the SBIR
Program. The Reauthorization Act required SBA to issue amendments to
the SBIR Policy Directive and publish the amendments in the Federal
Register within 180 days of when the Reauthorization Act was passed.
On August 6, 2012, SBA published a final SBIR Policy Directive
implementing the various provisions of the Reauthorization Act at 77 FR
46806. The directive made several key changes to the SBIR Program
relating to eligibility, the SBIR award process, SBIR Program
administration, and fraud, waste and abuse. Although the SBIR Policy
Directive is intended for use by the SBIR participating agencies, SBA
believed that public input on the directive from all parties involved
in the program would be invaluable. Therefore, SBA sought public
comments on the final directive, and stated that it may amend the
directive in response to these comments at a later time.
Response to Comments
In response to this request, SBA received comments on various parts
of the directive. Several comments recommended that SBA strengthen and
clarify the Policy Directive language with regard to SBIR data rights
and the obligation of federal agencies to give a preference in
contracting to SBIR awardees for follow-on Phase III work. SBA agrees
that these are areas of the SBIR policy that are vital to the program
and require clarification and improvement. SBA continues to evaluate
these issues and will address them in a subsequent Policy Directive
revision.
SBA also received comments that the definition of Essentially
Equivalent Work in section 3(j) of the Policy Directive should be
changed to be more in line with the common usage. The concern is that
the definition in the Policy Directive is more stringent than the norm
for Government contracting and places a higher burden on the small
businesses participating in the SBIR program. The commenter, however,
did not provide SBA with this commonly used definition and SBA could
not find one. Therefore, SBA has not modified the definition at this
time. However, SBA has revised the language in section 7(d) of the
Directive to further clarify funding of ``essentially equivalent
work.''
Section 4(a)(3) of the Policy Directive, ``Agency benchmarks for
progress towards commercialization'' sets forth the program policy
regarding an eligibility requirement for Phase I awards. SBA received
comments requesting clarification of the time periods used to calculate
the transition rate and commercialization rate benchmark requirements.
Commenters also requested clarification about how agencies determine
which firms must comply with the transition rate and commercialization
rate benchmarks. In response to these comments, SBA revised and
reorganized section 4(a)(3) to clarify several procedural elements
about the benchmark determinations and enhance its readability.
Section 4(a)(3) clarifies the time periods used to calculate
awardee rates of transition from Phase I to Phase II and provides two
examples of the calculation. While the rate is calculated using Phase I
awards received in the most recent 5,10, or 15-year period (agencies
choose which period they use), excluding the most recently completed
fiscal year; the period used when counting the Phase II awards is
lagged one year. That is, when calculating the number of Phase I awards
received over a particular time period, the time period evaluated does
not include the most recently completed fiscal year; however, when
calculating the number of Phase II awards received, the time period
evaluated does include the most recently completed fiscal year but does
not include the first year of the period evaluated for Phase I awards
received. The period used to calculate Phase II awards is lagged one-
year because it is unlikely that a new Phase I would transition to a
Phase II within the same year. SBA also clarified that the Phase II
transition benchmark requirement applies only to awardees that have
received more than 20 Phase I awards over the applicable time period
and that the commercialization benchmark applies only to firms that
received more than 15 Phase II awards over the applicable time period.
Based on additional input from the agencies participating in the
SBIR program, SBA also revised several procedural elements of the Phase
II transition benchmark requirement in section 4(a)(3) to simplify the
process for small businesses and reduce the administrative burden on
the agencies. Specifically, in section 4(a)(3)(iii), SBA changed the
start date for the one-year ineligibility period for firms that do not
meet the benchmarks. The date was changed from the date of application
submission to June 1st of each year. SBA made this change for several
reasons: (1) It is a clearly defined period for affected small
businesses; (2) to
[[Page 1304]]
provide sufficient time for agencies to enter fully verified award data
from the prior fiscal year into the TechNet database; and (3) to
eliminate the need for agencies to track multiple periods of
ineligibility. SBA will use its TechNet Data system to generate the
list of companies that do not meet agency Phase II transition
benchmarks and provide this list to the agencies each year on June 1.
Finally, SBA also added a procedure to notify awardee firms if they are
on the ineligible list and to enable firms to provide feedback directly
to SBA if they believe their rate was calculated using incomplete award
information.
Some respondents asked if the provision in section 4(b)(5) allowing
one Sequential Phase II award included supplementary awards such as
Phase 2.5 or Phase IIb awards in the definition of a Phase II award.
SBA relocated the language at section 4(b)(6) to new section 4(b)(8)
and added new section 4(b)(6) to clarify SBA's policy on supplemental
phase II awards. Section 4(b)(6) now clarifies how Phase II award
amounts are calculated when supplemental awards are issued.
Furthermore, section 4(b)(6) specifies that all supplementary awards,
such as a Phase IIb, must be linked to either an initial Phase II or a
sequential Phase II award and is added to the amount of that award for
the purpose of determining the size of the Phase II award. This means
that all supplementary Phase II awards including options, enhancements,
administrative supplements, and Phase IIb-type programs are considered
as part of the initial Phase II or sequential Phase II from which they
derive and are therefore subject to the Phase II per-award guideline
amount of $1 million and limit of $1.5 million.
SBA repeated the language in section 9(d)(2) in new section
4(b)(7), which explains how a Phase I awardee may receive an award from
one agency and also may receive a subsequent Phase II award from
another agency. SBA also clarified in section 4(b)(7) that the same
process applies to a second, sequential Phase II award that follows an
initial Phase II award from a different agency. This policy is relevant
to interagency actions, which are found at section 9 of the Policy
Directive, and also to Phase II awards, which is found at section 4 of
the Policy Directive.
SBA received comments concerning section 9 of the Policy Directive,
which address measures to prevent fraud, waste and abuse in the
program. The respondents commented that the administrative requirements
contained in section 9 may be too stringent and may discourage small
businesses from applying. SBA notes that it developed these
requirements, including the procedures and requirements for
certification, in consultation with the Council of Inspectors General
on Integrity and Efficiency. SBA believes that these provisions can
help reduce fraud, waste and abuse in the program and does not think
these provisions should be changed at this time.
SBA received comments on the Department of Defense's (DoD's)
Commercialization Readiness Program, outlined in section 12(b) of the
SBIR Policy Directive. In response to comments that agency efforts to
increase transitions to Phase III could reduce the innovative nature of
SBIR awards, SBA has added that when DoD reports on its Phase II
insertion incentives, it should note efforts to ensure that such
incentives do not act to shift the focus of SBIR Phase II awards away
from relatively high-risk innovation projects. SBA also amended the
provisions relating to the use of SBIR funds for the DoD
Commercialization Readiness Program. According to section 1615 of the
National Defense Authorization Act for Fiscal Year 2013 (NDAA), Public
Law 112-239, 126 Stat. 1632, DoD has the authority to use 1% of its
SBIR funding for purposes of administering the Commercialization
Readiness Program.
A number of comments asked us to change features that, because they
are required by statute, we were not able to modify.
Miscellaneous Changes
The inadvertent omission of the term ``extramural'' before ``R/R&D
budgets'' was corrected in section 2(b), which identifies the source of
funds for the program.
Section 3 contains definitions of terms that appear throughout the
Policy Directive. SBA made an editorial revision to the definition of
``Awardee'' in section 3(e). SBA revised the word ``receiving'' to
``that receives.''
Section 4(b)(1), which identifies the objective and nature of a
Phase II award, includes a statement regarding the eligibility of
successor in interest firms for SBIR awards. Because this statement
pertains more generally to eligibility for all SBIR awards, it was
removed from section 4(b)(1) and added to section 6(a) which addresses
program eligibility requirements.
In Section 6, SBA removed the reference to the STTR program
regarding the option to make awards to small businesses that are
majority owned by multiple venture capital operating companies, hedge
funds or private equity firms. When SBA issued its final size
regulations on December 27, 2012 (77 FR 76215), it reviewed this issue
and determined that such businesses may not participate in the STTR
program. Additionally, SBA added the language previously found at
section 4(b)(1) regarding successor in interest firms to section
6(a)(5), because section 6(a) addresses general program eligibility.
Sections 6(a)(2) through 6(a)(6) were reorganized and renumbered in
order to increase readability.
Section 7 addresses issues related to program funding processes.
SBA revised the language in paragraph 7(d) to clarify that while
duplicate or similar proposals may be submitted in response to
apparently similar solicitation topics, essentially equivalent work may
not be funded. In addition, SBA revised paragraph (h)(1), which says
that funding agreement modifications should be kept to a minimum, to
address only modifications that increase the dollar amount of awards.
Paragraph (h)(1) also referred to modifications of periods of
performance and scope of work. SBA clarified section 7(h)(1) to specify
that the concern regarding the number of modifications made to an award
pertains only to changes that increase the dollar amount of awards.
Section 8 of the Directive addresses the terms of agreement under
SBIR awards. SBA clarified section 8(a) by removing language stating
that agencies should discourage SBCs from submitting proprietary
information and revised section 8(d) to clarify that the continued use
of agency-owned property applies to property acquired by the awardee
under the contract.
In response to concerns regarding the cost and accountability of
the continuing study by the National Academy of Sciences, SBA modified
section 9(h) to clarify that the agreement required between the
agencies and the National Academy of Sciences must be made in
consultation with the SBA and must comprehensively address the scope
and content of the work to be performed.
Section 10(h) explains the process for agencies to submit their
SBIR program annual reports to SBA. Paragraph (h)(4) contains a list of
information that must be included in each agency's annual report. SBA
clarified section 10(h)(4)(xi) to note that agencies must report all
instances in which an agency pursued R/R&D, services, production, or
any combination thereof of a technology developed under an SBIR award
with an entity other than that SBIR awardee.
Section 10(j) contains information on the other reporting
requirements for
[[Page 1305]]
SBIR participating agencies. Section 10(j)(2) discusses a system that
will list any individual or small business concern that received an
SBIR award and that has been convicted of a fraud-related crime
involving SBIR funds or found civilly liable for a fraud-related
violation involving SBIR funds. SBA clarified this section to note that
SBA will list those individuals and small business concerns of which
SBA has been made aware.
Section 12(b) addresses the Commercialization Readiness Program at
the Department of Defense (DoD). SBA clarified the source of funding
for this program by removing the sentence in paragraph (b)(4)(ii)
stating that funds for the program would come from the 3%
administrative set-aside, and by clarifying that the funds shall not be
subject to the limitations on the use of funds in section 9(e)(3). In
addition, in section 12(b)(6)(iii)(C), SBA clarified that the DoD must
include, along with its description of the incentives used for this
program, information on measures taken to ensure that such incentives
do not shift the focus of the SBIR Phase II awards away from the
relatively high-risk innovation projects they are intended to promote.
Section 12(b)(5) addresses DoD's Commercialization Readiness
Program. The Policy Directive states that DoD may establish transition
goals and reporting requirements for awards less than $1,000,000,000.
The amount listed in section 12(b)(5) contained a typographical error,
which was corrected to $100,000,000.
Appendix I provides instructions for the preparation of program
solicitations. In Appendix I, SBA revised the certification check box
regarding notification if work is subsequently funded by another
Federal agency to clarify that it pertains to work funded and completed
under the award rather than to the work proposed for the award.
The updated SBIR Policy Directive, incorporating all changes noted
here, will be posted on www.sbir.gov.
Notice of Amendments to Final Policy Directive; Small Business
Innovation Research Program
To: The Small Business Innovation Research Program Managers.
Subject: Amendments to SBIR Policy Directive Published on August 6,
2012 at 77 FR 46806.
1. Purpose. The purpose of this notice is to inform SBIR agencies
of amendments made to the recently published SBIR Policy Directive.
2. Authority. Section 9(j)(3) of the Small Business Act (15 U.S.C.
638(j)) requires the Administrator of the U.S. Small Business
Administration (SBA) to issue an SBIR Program Policy Directive for the
general conduct of the SBIR Program.
3. Procurement Regulations. It is recognized that the Federal
Acquisition Regulations and agency supplemental regulations may need to
be modified to conform to the requirements of the final Policy
Directive. SBA's Administrator or designee must review and concur with
any regulatory provisions that pertain to areas of SBA responsibility.
SBA's Office of Innovation coordinates such regulatory actions.
4. Personnel Concerned. This Policy Directive serves as guidance
for all federal government personnel who are involved in the
administration of the SBIR Program, issuance and management of Funding
Agreements or contracts pursuant to the SBIR Program, and the
establishment of goals for small business concerns in research or
research and development acquisition or grants.
5. Originator. SBA's Office of Innovation and Technology.
6. Date. The policy directive is effective on January 8, 2014.
Authorized by:
Dated: December 26, 2013.
Pravina Raghavan,
Deputy Associate Administrator, Office of Investment and Innovation
Small Business Administration.
Dated: December 26, 2013.
Jeanne Hulit,
Acting Administrator.
SBA amends the SBIR Policy Directive as follows:
1. Amend section 2(b) by adding the term ``extramural'' before ``R/
R&D budgets'' each place it appears.
2. Revise section 3(e) to read as follows:
(e) Awardee. The organizational entity that receives an SBIR Phase
I, Phase II, or Phase III award.
3. Revise section 4(a)(3) to read as follows:
(3) Agency benchmarks for progress towards commercialization. Each
agency must determine whether an applicant for a Phase I award that has
won multiple prior SBIR awards meets the agency's benchmark
requirements for progress towards commercialization before making a new
Phase I award to that applicant. For the purpose of this requirement,
applicants are assessed using their prior Phase I and Phase II SBIR and
STTR awards across all SBIR agencies.
(i) Agencies must apply two benchmark rates addressing an
applicant's progress towards commercialization--the Phase II Transition
Rate Benchmark and the Commercialization Rate Benchmark.
(A) The Phase II Transition Rate Benchmark sets the minimum
required number of Phase II awards the applicant must have received for
a given number of Phase I awards received during the specified period.
This Transition Rate Benchmark applies only to Phase I applicants that
have received more than 20 Phase I awards over the time period used by
the agency for the benchmark determination.
(B) The agency Commercialization Rate Benchmark sets the minimum
Phase III commercialization results that a Phase I applicant must have
realized from its prior Phase II awards in order to be eligible to
receive a new Phase I award from that agency. This benchmark
requirement applies only to Phase I applicants that have received more
than 15 Phase II awards over the time period used by the agency for the
benchmark determination.
(ii) Consequence. If an awardee fails to meet either of the
benchmarks, that awardee is not eligible for an SBIR Phase I award (and
any Phase II award issued pursuant to paragraph (b)(1)(ii) below) for a
period of one year from the time of the determination.
(iii) Timing of the determination and consequence period. The SBIR
awardee Phase II transition rates and commercialization rates are
calculated using the data in SBA's TechNet database. For the purpose of
these benchmark requirements, awardee firms are assessed once a year,
on June 1st, using their prior SBIR and STTR awards across all
agencies. SBA makes this tabulation of awardee transition rates and
commercialization rates available to the agencies. Each SBIR agency
uses this tabulation to determine which companies do not meet that
agency's benchmark rates and are therefore ineligible to receive new
Phase 1 awards from that agency during the one-year period beginning on
June 1st and ending on May 31st. SBA notifies these ineligible firms of
the determination and the one year restriction on Phase I awards.
Agencies must notify SBA of any applications denied because of the
failure to meet the benchmarks.
(iv) Phase II Transition Rate Benchmark. Each agency must establish
an SBA-approved Phase II Transition Rate Benchmark and applicable time
period. The benchmark rates and time periods are posted at
www.sbir.gov. Agencies must seek approval for any subsequent changes
from SBA.
(A) The agency Phase II Transition Rate Benchmark establishes the
number of Phase II awards a small business
[[Page 1306]]
concern must have received for a given number of Phase I awards
received over the past 5, 10 or 15 fiscal years, excluding the most
recently completed fiscal year. Each agency selects both the rate to be
applied and the length of time that the agency will use to evaluate
whether a small business concern has met the Transition Rate Benchmark.
The period over which Phase I awards are counted excludes the most
recently completed fiscal year. The time period over which Phase II
awards are counted includes the most recently completed fiscal year and
excludes the first year of the time period evaluated for Phase I
awards.
Example: On August 1, 2014, an SBC submits an application to an
agency using a Transition Rate Benchmark of 0.25 and a 5-year time
period. The June 1, 2014 TechNet Company Registry tabulation shows
that the SBC received 24 Phase I awards during FY08-FY12. Since this
SBC has received 20 or more Phase I awards during the 5-year period,
the SBC is required to meet the Transition Rate Benchmark. The SBC
received 8 Phase II awards in FY09-FY13 and therefore has a 5-year
Phase II transition rate of 8/24 or 0.33 ( of Phase II
awards in FY09-FY13/ of Phase I awards in FY08-FY12).
Because the SBC meets or exceeds the agency Transition Rate
Benchmark, it is considered for award through the usual proposal
evaluation process.
Example 2: On September 1, 2014, an SBC is interested in
applying for a Phase I award, knows it has received a number of
Phase I awards in recent years, but is unsure if it is meeting the
required Phase II transition rate. The company official logs onto
the Company Registry at SBIR.gov to check its status and sees a flag
saying it did not meet the required benchmark transition rate of
0.25 on June 1, 2014 and is therefore ineligible for a Phase I award
through May 31, 2015. The company checks its records and sees that
it received 30 Phase I awards during FY08-FY12 and 6 Phase II awards
during FY09-FY13. Its transition rate is therefore 6/30 or 0.20
which is under the required rate of 0.25. The SBC does not apply for
a new Phase I award through May 31, 2015 because it knows its
application would be rejected.
Example 3: On September 1, 2014, an SBC official interested in
applying for a Phase I award logs onto the Company Registry at
SBIR.gov and sees the flag saying it did not meet the required
benchmark transition rate of 0.25 on June 1, 2014 and is not
eligible for a Phase I award through May 31, 2015. However, when the
company checks its own records, it sees that it received 8 Phase II
awards during FY09-FY13, not the 6 awards showing on the Web site.
Its transition rate is therefore 8/30 or 0.26 which is above the
required rate of 0.25. The company official therefore goes to
SBIR.gov, clicks on the ``Dispute Transition Rate'' button, and
enters the information about the discrepancy. SBA uses the
information provided by the company and, working with the relevant
agencies, identifies that two Phase II awards from FY09 had been
inadvertently omitted. SBA updates and corrects the database and
informs the firm that it is indeed eligible to receive SBIR Phase I
awards.
(B) An SBC that has received more than 20 Phase I awards in the
relevant time period can view its Phase II transition rate on the
Company Registry page at SBIR.gov. Generally, the award data used to
calculate an SBC's transition rate will be complete by the end of March
each year. An SBC may view its SBIR/STTR award information on the
Company Registry at any time. If an awardee believes its Phase II
transition rate is calculated using incomplete award information, the
awardee may dispute the rate using the link provided on the Company
Registry, provide the additional award information, and request a
reconsideration of its transition rate. Requests for reconsideration of
a firm's transition rate received by SBA from April 1st through April
30th of each year will be considered for the June 1st transition rate
assessment.
(C) Agencies must set the Phase II Transition Rate Benchmark as
appropriate for their programs and industry sectors. When setting the
Transition Rate Benchmark, agencies should consider that Phase I is
designed and intended to explore high-risk, early-stage research ideas
and, as a result, not all Phase I awards are expected to result in a
Phase II award.
(v) Commercialization Rate Benchmark. By October 1, 2013, each
agency will establish an SBA-approved Commercialization Rate Benchmark
that establishes the level of Phase III commercialization results an
SBC must have received from work it performed under prior Phase II
awards, over the prior 5, 10 or 15 fiscal years, excluding the most
recently completed two fiscal years. Agencies may define this
benchmark:
(A) in financial terms, such as by using the ratio of the dollar
value of revenues and additional investment resulting from prior Phase
II awards relative to the dollar value of the Phase II awards received
over the time period;
(B) in terms of the share of Phase II awards received over the time
period that have resulted in the introduction of a product to market;
or
(C) by other means such as using a commercialization scoring system
that rates awardees on their past commercialization success.
(vi) Agencies must submit their Transition Rate Benchmark,
Commercialization Rate Benchmark, and time periods to SBA for approval.
SBA will publish the benchmarks and time periods, seek public comment,
and maintain a table of the current requirements on www.sbir.gov. The
benchmarks and time periods become effective when SBA posts the
approved measures on www.sbir.gov. Agencies must submit any changes to
the benchmarks or time periods to SBA for prior approval.
(vii) SBA maintains a system that records all Phase I, Phase II and
Government Phase III awards, and other commercialization information;
and calculates the Phase II transition rates for all Phase I awardees
and the commercialization rates for all Phase II awardees.
(viii) If an applicant fails to meet an agency's benchmark, its
name will appear on the list of companies made available to the
agencies on June 1 of each year. An agency may not make a Phase I award
to an applicant that does not meet the agency's benchmark.
(ix) If an awardee believes its determination was made in error, it
may provide SBA with the pertinent award information and request a
reassessment. To do so, awardees may use the link on the Company
Registry at www.sbir.gov.
4. Amend section 4(b) by revising paragraph (b)(1) by moving
language to 6(a)(4), renumbering paragraph (b)(6) as (b)(8), and
inserting paragraphs (b)(6) and (b)(7) to read as follows:
(b) Phase II.
(1) The object of Phase II is to continue the R/R&D effort from the
completed Phase I. Unless an exception set forth in paragraphs (i) or
(ii) below applies, only SBIR Phase I awardees are eligible to
participate in Phase II.
(i) A Federal agency may issue an SBIR Phase II award to an STTR
Phase I awardee to further develop the work performed under the STTR
Phase I award. The agency must base its decision upon the results of
work performed under the Phase I award and the scientific and technical
merit, and commercial potential of the Phase II proposal. The STTR
Phase I awardee must meet the eligibility and program requirements of
the SBIR Program in order to receive the SBIR Phase II award.
(ii) During fiscal years (FY) 2012 through 2017, the National
Institutes of Health (NIH), Department of Defense (DoD) and the
Department of Education (DoEd) may issue a Phase II award to a small
business concern that did not receive a Phase I award for that R/R&D.
Prior to such an award, the heads of those agencies, or designees, must
issue a written determination that the small business has demonstrated
the scientific and technical merit and feasibility of the ideas that
appear to have commercial potential. The determination must be
[[Page 1307]]
submitted to SBA prior to issuing the Phase II award.
. . . [paragraphs (2) through (4) are unchanged] . . .
(5) A Phase II awardee may receive one additional, sequential Phase
II award to continue the work of an initial Phase II award. The
additional, sequential Phase II award has the same guideline amounts
and limits as an initial Phase II award.
(6) Agencies may offer special SBIR awards, such as Phase IIB
awards, that supplement or extend Phase II awards. For example, some
agencies administer Phase IIB awards that differ from the base Phase II
in that they require third party matching of the SBIR funds. Each such
supplemental award must be linked to a base Phase II award (the initial
Phase II, or the second sequential Phase II award). Any SBIR funds used
for such special or supplementary awards are aggregated with the amount
of the base Phase II to determine the size of that Phase II award.
Therefore, while there is no limit on the number of such special/
supplementary awards, there is a limit on the total amount of SBIR
funds that can be administered through them--the amounts of these
awards count towards the size of the initial Phase II or the sequential
Phase II, each of which has a guideline amount of $1 million and a
limit of $1.5 million. (Note that Phase IIB awards under the NIH SBIR
program are administered as second, sequential Phase II awards, not
supplemental awards. As such, they are base Phase II awards and subject
to the Phase II guideline amounts and limits of $1 million and $1.5
million).
(7) A concern that has received a Phase I award from an agency may
receive a subsequent Phase II award from another agency if each agency
makes a written determination that the topics of the relevant awards
are the same and both agencies report the awards to the SBA including a
reference to the related Phase I award and initial Phase II award if
applicable.
(8) Agencies may issue Phase II awards for testing and evaluation
of products, services, or technologies for use in technical or weapons
systems.
5. Revise section 6(a)(2) through Sec. 6(a)(6)to read as follows:
(2) For Phase I, a minimum of two-thirds of the research or
analytical effort must be performed by the awardee. For Phase II, a
minimum of one-half of the research or analytical effort must be
performed by the awardee. Occasionally, deviations from these
requirements may occur, and must be approved in writing by the funding
agreement officer after consultation with the agency SBIR Program
Manager/Coordinator. An agency can measure this research or analytical
effort using the total contract dollars or labor hours, and must
explain to the small business in the solicitation how it will be
measured.
(3) For both Phase I and Phase II, the primary employment of the
principal investigator must be with the SBC at the time of award and
during the conduct of the proposed project. Primary employment means
that more than one-half of the principal investigator's time is spent
in the employ of the SBC. This precludes full-time employment with
another organization. Occasionally, deviations from this requirement
may occur, and must be approved in writing by the funding agreement
officer after consultation with the agency SBIR Program Manager/
Coordinator. Further, an SBC may replace the principal investigator on
an SBIR Phase I or Phase II award, subject to approval in writing by
the funding agreement officer. For purposes of the SBIR Program,
personnel obtained through a Professional Employer Organization or
other similar personnel leasing company may be considered employees of
the awardee. This is consistent with SBA's size regulations, 13 CFR
121.106--Small Business Size Regulations.
(4) For both Phase I and Phase II, the R/R&D work must be performed
in the United States. However, based on a rare and unique circumstance,
agencies may approve a particular portion of the R/R&D work to be
performed or obtained in a country outside of the United States, for
example, if a supply or material or other item or project requirement
is not available in the United States. The funding agreement officer
must approve each such specific condition in writing.
(5) An SBIR awardee may include, and SBIR work may be performed by,
those identified via a ``novated'' or ``successor in interest'' or
similarly-revised funding agreement, or those that have reorganized
with the same key staff, regardless of whether they have been assigned
a different tax identification number. Agencies may require the
original awardee to relinquish its rights and interests in an SBIR
project in favor of another applicant as a condition for that
applicant's eligibility to participate in the SBIR Program for that
project.
(6) NIH, Department of Energy and National Science Foundation may
award not more than 25% of the agency's SBIR funds to SBCs that are
owned in majority part by multiple venture capital operating companies,
hedge funds, or private equity firms through competitive, merit-based
procedures that are open to all eligible small business concerns. All
other SBIR agencies may award not more than 15% of the agency's SBIR
funds to such SBCs. SBIR agencies may or may not choose to utilize this
funding option. A table listing the agencies that are currently using
this authority can be found at www.SBIR.gov. This authority is set
forth in 13 CFR 121.701 through 121.705.
(i) Before permitting participation in the SBIR program by SBCs
that are owned in majority part by multiple venture capital operating
companies, hedge funds, or private equity firms, the SBIR agency must
submit a written determination to SBA, the Senate Committee on Small
Business and Entrepreneurship, the House Committee on Small Business
and the House Committee on Science, Space, and Technology at least 30
calendar days before it begins making awards to such SBCs. The
determination must be made by the head of the Federal agency or
designee and explain how awards to such SBCs in the SBIR program will:
(A) induce additional venture capital, hedge fund, or private
equity firm funding of small business innovations;
(B) substantially contribute to the mission of the Federal agency;
(C) address a demonstrated need for public research; and
(D) otherwise fulfill the capital needs of small business concerns
for additional financing for SBIR projects.
(ii) The SBC that is majority-owned by multiple venture capital
operating companies, hedge funds, or private equity firms must register
with SBA in the Company Registry Database, at www.SBIR.gov, prior to
the date it submits an application for an SBIR award.
(iii) The SBC that is majority-owned by multiple venture capital
operating companies, hedge funds, or private equity firms must submit a
certification with its proposal stating, among other things, that it
has registered with SBA.
(iv) Any agency that makes an award under this paragraph during a
fiscal year shall collect and submit to SBA data relating to the number
and dollar amount of Phase I awards, Phase II awards, and any other
category of awards by the Federal agency under the SBIR program during
that fiscal year. See section10 of this directive for the specific
reporting requirements.
(v) If an agency awards more than the percentage of the funds
authorized under section 6(a)(2) of the Policy Directive, the agency
shall transfer from its non-SBIR and non-STTR R&D funds to the agency's
SBIR funds any amount
[[Page 1308]]
that is in excess of the authorized amount. The agency must transfer
the funds not later than 180 days after the date on which the Federal
agency made the award that exceeded the authorized amount.
(vi) If a Federal agency makes an award under a solicitation more
than 9 months after the date on which the period for submitting
applications under the solicitation ends, a Covered Small Business
Concern is eligible to receive the award, without regard to whether it
meets the eligibility requirements of the program for a SBC that is
majority-owned by multiple venture capital operating companies, hedge
funds, or private equity firms, if the Covered Small Business Concern
meets all other requirements for such an award. In addition, the agency
must transfer from its non-SBIR and non-STTR R&D funds to the agency's
SBIR funds any amount that is so awarded to a Covered Small Business
Concern. The funds must be transferred not later than 90 days after the
date on which the Federal agency makes the award.
6. Revise section 7(d) to read as follows:
(d) Essentially Equivalent Work. SBIR participants often submit
duplicate or similar proposals to more than one soliciting agency when
the announcement or solicitation appears to involve similar topics or
requirements. However, ``essentially equivalent work'' must not be
funded in the SBIR or other Federal programs, unless an exception to
this rule applies. Agencies must verify with the applicant that this is
the case by requiring them to certify at the time of award and during
the lifecycle of the award that they do not have essentially equivalent
work funded by another Federal agency.
7. Revise section 7(h)(1) to read as follows:
(h) Periods of Performance and Extensions.
(1) In keeping with the legislative intent to make a large number
of relatively small awards, modification of funding agreements to
increase the dollar amount should be kept to a minimum, except for
options in original Phase I or II awards.
8. Revise section 8(a) to read as follows:
(a) Proprietary Information Contained in Proposals. The
standardized SBIR Program solicitation will include provisions
requiring the confidential treatment of any proprietary information to
the extent permitted by law. The solicitation will require that all
proprietary information be identified clearly and marked with a
prescribed legend. Agencies may elect to require SBCs to limit
proprietary information to that essential to the proposal and to have
such information submitted on a separate page or pages keyed to the
text. The Government, except for proposal review purposes, protects all
proprietary information, regardless of type, submitted in a contract
proposal or grant application for a funding agreement under the SBIR
Program, from disclosure.
9. Revise section 8(d) to read as follows:
(d) Continued Use of Government Equipment. Agencies must allow an
SBIR awardee participating in the third phase of the SBIR Program
continued use, as a directed bailment, of any property transferred by
the agency to the Phase II awardee or acquired by the awardee for the
purpose of fulfilling the contract. The Phase II awardee may use the
property for a period of not less than 2 years, beginning on the
initial date of the concern's participation in the third phase of the
SBIR Program.
10. Revise section 9(h) to read as follows:
(h) National Academy of Sciences Report. The National Academy of
Sciences (NAS) will conduct a study and issue reports on the SBIR and
STTR programs.
(1) Prior to and during the period of study, and to ensure that the
concerns of small business are appropriately considered, NAS shall
consult with and consider the views of SBA's Office of Investment and
Innovation and the Office of Advocacy and other interested parties,
including entities, organizations, and individuals actively engaged in
enhancing or developing the technological capabilities of small
business concerns.
(2) The head of each agency with a budget of more than $50,000,000
for its SBIR Program for fiscal year 1999 shall, in consultation with
SBA, and not later than 6 months after December 31, 2011, cooperatively
enter into an agreement with NAS regarding the content and performance
of the study. SBA and the agencies will work with the Interagency
Policy Committee in determining the parameters of the study, including
the specific areas of focus and priorities for the broad topics
required by statute. The agreement with NAS must set forth these
parameters, specific areas of focus and priorities, and comprehensively
address the scope and content of the work to be performed. This
agreement must also require the NAS to ensure there is participation by
and consultation with, the small business community, the SBA, and other
interested parties as described in paragraph (1).
(3) NAS shall transmit to SBA, heads of agencies entering into an
agreement under this section, the Committee on Science, Space and
Technology, the Committee on Small Business of the House of
Representatives, and to the Committee on Small Business of the Senate a
copy of the report, which includes the results and recommendations, not
later than 4 years after December 31, 2011, and every subsequent four
years.
11. Revise section 10(h)(4)(xi) to read as follows:
(xi) All instances in which an agency pursued R/R&D, services,
production, or any combination thereof of a technology developed under
an SBIR award with an entity other than that SBIR awardee. See section
9(a)(12) for minimum reporting requirements.
12. Revise section 10(j)(2) to read as follows:
(2) The system will include a list of any individual or small
business concern that has received an SBIR award and that has been
convicted of a fraud-related crime involving SBIR funds or found
civilly liable for a fraud-related violation involving SBIR funds, of
which SBA has been made aware.
13. Revise section 12(b)(4) to read as follows:
(4) Funding.
(i) Beginning with FY 2013 and ending in FY 2015, the Secretary of
Defense and each Secretary of a military department is authorized to
use its SBIR funds for administration of this program in accordance
with the procedures and policies set forth in section 9(e)(3) of this
directive.
(ii) In addition, the Secretary of Defense and Secretary of each
military department is authorized to use not more than an amount equal
to 1% of its SBIR funds available to DoD or the military departments
for payment of expenses incurred to administer the Commercialization
Program. Such funds--
(A) shall not be subject to the limitations on the use of funds in
9(e)(2) or 9(e)(3) of this directive; and
(B) shall not be used to make Phase III awards.
14. Revise section 12(b)(5) to read as follows:
(5) Contracts Valued at less than $100,000,000. For any contract
awarded by DoD valued at less than $100,000,000, the Secretary of
Defense may:
(i) establish goals for the transition of Phase III technologies in
subcontracting plans; and
(ii) require a prime contractor on such a contract to report the
number and dollar amount of the contracts entered
[[Page 1309]]
into by the prime contractor for Phase III SBIR projects.
15. Revise section 12(b)(6) to read as follows:
(6) The Secretary of Defense shall:
(i) set a goal to increase the number of SBIR Phase II contracts
that lead to technology transition into programs of record of fielded
systems;
(ii) use incentives in effect as of December 31, 2011 or create new
incentives to encourage agency program managers and prime contractors
to meet the goal set forth in paragraph (6)(i) above; and
(iii) submit the following to SBA, as part of the annual report:
(A) the number and percentage of Phase II SBIR contracts awarded by
DoD that led to technology transition into programs of record or
fielded systems;
(B) information on the status of each project that received funding
through the Commercialization Program and the efforts to transition
these projects into programs of record or fielded systems; and
(C) a description of each incentive that has been used by DoD, the
effectiveness of the incentive with respect to meeting DoD's goal to
increase the number of SBIR Phase II contracts that lead to technology
transition into programs of record of fielded systems, and measures
taken to ensure that such incentives do not act to shift the focus of
SBIR Phase II awards away from relatively high-risk innovation
projects.
16. Revise paragraph 1(a) of the Appendix I: Instructions for
Preparation of SBIR Program Solicitation to read as follows:
(a) Summarize in narrative form the request for proposals and the
objectives of the SBIR Program.
17. In Appendix I, in the SBIR Funding Agreement Certification and
the SBIR Funding Agreement Certification--Life Cycle Certification,
revise the checkbox addressing potential duplicative funding to read as
follows:
It will notify the Federal agency immediately if all or a portion of
the work authorized and funded under this award is subsequently funded
by another Federal agency.
[FR Doc. 2013-31374 Filed 1-7-14; 8:45 am]
BILLING CODE 8025-01-P