Joni Ernst Leads Senate Small Business Committee Hearing About Reforming Seed Funding Programs

Introduction

• The Small Business Committee and its focus

  • Tonight's agenda: discussion on SBIR (Small Business Innovation Research) and STTR (Small Business Technology Transfer) programs

  • Importance of these programs: fostering partnerships between federal agencies and private sector to address challenges in R&D.

  • Need for reforms to maximize potential and ensure responsible spending of taxpayer funds.

SBIR and STTR Overview

• Assessment of programs' success and areas for reform

  • Current funding spans 11 federal agencies and covers critical technology areas.

  • SBIR's potential to enhance competition, improve supply chains, and strengthen technological leadership.

INNOVATE Act Proposal

• Introduction of the INNOVATE Act

  • Aimed at reauthorizing and reforming the SBIR and STTR programs.

  • Goals of the Act:

    • Streamlining and simplifying processes.

    • Merit-based funding allocation.

    • Commercialization acceleration for promising projects.

    • Accountability measures to protect national security.

Key Reforms Proposed

• Phase One Reforms

  • Simplified 2-page proposal process for new applicants

  • Reduced one-time awards to increase accessibility for innovators.

  • Eliminates Diversity, Equity, and Inclusion (DEI) preferences for a merit-based evaluation.

• Addressing SBIR Mills

  • Targeting firms with existing connections that dominate funding with few results.

  • Proposal of a $775 million lifetime cap on funding for repetitive recipients, ensuring previous funds lead to demonstrable progress.

  • Encouragement of commercial traction with follow-on contracts.

• Empowering DoD

  • Repurposing underutilized STTR Phase Two funding for strategic breakthrough awards up to $30 million.

  • Limited eligibility to businesses showing progress towards commercialization.

  • Must secure matching funds to ensure commitment to project.

• National Security Protections

  • Introduction of a clear definition of foreign risk to strengthen evaluation processes.

  • Established disqualifying ties to nations of concern.

  • Agencies granted clawback authority for technologies exposed to adversarial influence.

Impact of SBIR/STTR Programs

• Historical significance since inception in 1982 (SBIR) and 1992 (STTR).

  • Importance in addressing federal R&D needs by involving small businesses in innovation.

  • Contribution to various technological advancements (e.g., LASIK and basic communication technologies).

  • Massachusetts highlights its leadership in SBIR awards and technological ecosystems.

Witness Statements

Mr. Austin Straw Hacker

• Role and contributions at America's SBDC in Iowa.

• SBIR’s role in fostering innovation and economic growth in Iowa.

• Emphasis on localized support and partnerships to assist innovators.

• Highlighted the need for simplifying the application process and enhancing support for rural innovators.

Dr. Ken Mahmud

• Capabilities and contributions of Triton Systems as an SBIR awardee.

• Examples of technologies developed and their impacts on national security and the economy.

  • Mentioned SBIR-derived components for F-35 and F-22 aircraft.

• Calls for incentives for transitioning to Phase Three in defense technology.

Mr. Caleb Carr

• Personal story of founding Vita after a tragic event and the difficulties in securing funding.

• Successes attributed to the SBIR program and its impact on rescuing lives.

• Advocated for stricter controls on repetitive funding for firms that do not achieve commercialization.

Mr. David Rothside

• Emphasis on the importance of utilizing private capital to support national security technology advancements.

• Discussion of funding dynamics shifting towards dual-use technologies and ventures.

• Urged for the SBIR program to be a launchpad for innovative solutions while addressing barriers in procurement transition.

Insights on the Evolving Role of SBIR/STTR

• Importance of competition in SBIR funding allocations.

• Examination of the existing distribution of awards demonstrating concentration among established players, which may disadvantage emerging startups.

• Suggestions for enhancements, including generalizing solicitation topics and streamlining proposal requirements.

Conclusion

• The SBIR and STTR programs' potential to drive innovation in America should focus on ensuring fair access and accountability.

• The need for ongoing collaboration among federal agencies, local resource providers, and entrepreneurs.

• Insights from the hearing reaffirm the commitment to refining these programs to support small businesses and technological advancements effectively.