Shaheen, Ayotte hail SBIR funding deal

After years of stalled negotiations, Congress has finally reached a deal that would give long-term reauthorization to two popular programs that make it easier for small businesses to win federal contracts.The U.S. House and Senate have agreed on the terms of an amendment that would reauthorize the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs for six years. Under the agreement, the percentage of funds that is dedicated to small firms through the programs would also be bumped up.Even though both Democrats and Republicans have lauded the programs for spurring small business innovation and growth, their long-term reauthorization has been elusive, as both bodies of Congress have battled over what their terms should be.As a result, the SBIR and STTR programs have been squeaking by on short-term authorizations for years. Since 2008, the programs have been extended 14 times, with the latest authorization set to expire Dec. 16.Supporters of the programs say the piecemeal funding makes it difficult for the participating federal agencies and small businesses to plan for the long term.Established in 1982, the SBIR program offers competitive grants to small defense and technology companies to help them compete for federal research dollars.It’s funded through the existing R&D budgets of 11 participating government agencies, which set aside 2.5 percent of their grants for small companies. The smaller STTR program sets aside additional money for partnerships between small businesses and nonprofit research institutions.Since it was enacted, small New Hampshire firms have won $370 million in SBIR grants, which ranks the state 22nd nationally for total grants awarded.”SBIR has provided a critical boost to many innovative small companies that have gone on to find great success,” said U.S. Sen. Jeanne Shaheen, D-N.H., who along with U.S. Sen. Kelly Ayotte, R-N.H., has worked to secure the longer-term funding.Earlier this month, the Senate passed a bipartisan amendment as part of the National Defense Authorization Act that would have reauthorized the programs for eight years. It then went to the House, which worked to blend the Senate amendment with its own version that it had been considering for months.The Senate and the House had historically disagreed on many different aspects of the program, including how it should be funded, which firms should be eligible for the funds and whether or not there should be a cap on the number of awards a company could receive.Among the key aspects of the agreement:• The amount of funding available for small private equity firms would be increased, bumping up venture capital participation to 25 percent for three participating agencies and 15 percent for the rest.• Both Phase I and Phase II award levels, which have not been raised since 1982, would be increased. The award guidelines for SBIR and STTR awards would be increased from $100,000 to $150,000 for Phase I and from $750,000 to $1 million for Phase II, allowing for an additional Phase II for projects that are especially promising.• The SBIR program allocation would be raised from 2.5 to 3.2 percent and the STTR allocation from .3 percent to .45 percent over the course of the reauthorization. Shaheen said that the increase would amount to some $641 million extra a year for small firms.• Most agencies would be required to complete their review process for applicants within 90 days (or 180 days if granted an extension by the Small Business Administration), giving small businesses more certainty as to when they can expect a decision on their awards.• Performance-based standards would be introduced to encourage companies to focus on commercialization through Phase III of the program.Both Shaheen and Ayotte were among a bipartisan group of 11 senators who sent a letter to the heads of both chambers’ small business committees. In it, they urged both sides to work toward a compromise.”SBIR gives tremendous opportunities to New Hampshire’s small technology firms, generating increased growth and supporting their innovative contributions to our national security,” said Ayotte, who co-sponsored the amendment.Even though Congress has finally reached an agreement over the terms of the programs, there’s still a chance the reauthorization won’t see the light of day.That’s because it’s included as part of the National Defense Authorization Act. The bill is expected to pass before the end of the year, but President Obama has threatened to veto it because it contains some controversial amendments that relate to detaining suspected terrorists. — KATHLEEN CALLAHAN/NEW HAMPSHIRE BUSINESS REVIEW