Small Business Startup News

Congress Reaches Last Minute Deal To Fund Two Critical SMB Programs

Written by Tim Morral
Published: 12/13/2011

House and Senate lawmakers agree to extend the SBIR and STTR programs for small business research and innovation.

On Monday night, members of the House and Senate agreed to a six-year reauthorization for a pair of highly successful small business programs: the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) initiatives.

Congress Funds SBIR and STTR Programs for SMBs

The SBIR and STTR initiatives require federal agencies to award a segment of their grants and contracts to small businesses. Both programs have been operating under a string of short-term reauthorizations, which were set to expire in less than four days.

"As our nation continues to recover economically, it is important for Congress to pass legislation like this that helps our nation's most effective job creators and innovators -- our small businesses," said Rep. Sam Graves (R-Mo.), the chairman of the House Small Business Committee.

Currently, the 11 federal agencies participating in SBIR are required to dedicate 2.5% of their R&D investments to the program, and the 5 agencies in the STTR program must commit .3% of their external research budgets to small businesses. According to the new agreement, the SBIR allocations will rise to 3.2% and the STTR allocation will rise to .45%.

The new agreement also contains provisions to increase early stage funding awards and to allow VC-backed firms to compete for up to 25% of SBIR funds from the National Institute of Health and the Energy Department as well as 15% of the SBIR funds from other agencies.

Reaction from the small business community about the long-term reauthorization agreement has been overwhelmingly positive.

"Small business is the primary source of innovation and new technology development, and that's been the truth for a long time," said Jere Glover, executive director of the Small Business Technology Council. "These programs are really the only ones designed to make sure small business at least gets some part of the innovation budget."

The reauthorization plan for the STTR and SBIR initiatives will be attached to the defense reauthorization bill, which is expected to arrive on President Obama's desk later this week.

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