SBIR/STTR Extension Act (S. 4900)

Summary

Keeps popular research programs for small businesses running until 2025 and adds new rules to protect against security risks from other countries.

What problem does this solve?

Federal programs that help small businesses develop new technology were about to end. There were also growing worries that some countries were using these programs to gain access to American research. This law continues the programs for three more years and requires companies to disclose foreign ties, helping to protect national security.

What does this law do?

Extends innovation programs until 2025

Continues the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs for three years, from 2022 to 2025.

Requires security checks for foreign risks

Directs federal agencies to create due diligence programs to check small businesses for security risks, such as foreign ownership or financial ties to countries of concern like China, Russia, North Korea, and Iran.

Mandates disclosure of foreign connections

Forces small businesses applying for awards to reveal any connections to foreign countries of concern. This includes joint ventures, financial obligations, or owners who are part of a foreign talent recruitment program.

Sets higher standards for frequent award winners

Creates stricter performance rules for businesses that have won over 50 awards. These companies must show more success in turning their research into actual sales and investments to remain eligible for future funding.

Allows agencies to deny awards based on security risks

Gives federal agencies the power to deny funding to a small business if its ties to a foreign country of concern pose a risk to national security, create a conflict of interest, or were not properly disclosed.

Authorizes repayment of funds for security risks

Requires a small business to repay all award money if it lies about a material fact or if a change in its ownership creates a national security risk.

Creates 'Open Topic' innovation program at Department of Defense

Requires the Department of Defense to use 'open topics' for some of its SBIR/STTR awards. This allows a wider range of small businesses to propose innovative solutions, not just those that fit a narrow, pre-defined topic.

Prevents private entities from shaping grant topics

Requires federal agencies to use a multi-level review process for grant topics to ensure fair competition and prevent any private individual or company from influencing the requirements.

Who does this affect?

Small businesses in technology and research sectors
Federal agencies (e.g., Department of Defense, National Science Foundation)
Venture capital firms and investors in technology

What is the real world impact?

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Continues support for small business innovation

Ensures that the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, which provide federal funding for research and development, do not expire. This allows small businesses to continue developing new technologies for federal agencies and the commercial market.

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Improves program performance

Introduces higher performance standards for companies that receive a large number of awards. This encourages businesses to focus on successfully commercializing their technology rather than just winning grants, ensuring taxpayer money leads to real-world products and services.

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Protects U.S. technology from foreign adversaries

Creates new security rules to prevent countries like China, Russia, and Iran from exploiting these programs. Companies must now disclose any financial ties or affiliations with these countries, and agencies can deny funding to businesses that pose a national security risk.

When does this start?

This law became effective on September 30, 2022, and includes several deadlines for federal agencies to implement its new rules.

Increased performance standards effective date

New, higher performance standards for companies that frequently win awards take effect on April 1, 2023.

Agency security program implementation

Federal agencies have 270 days from the law's enactment to establish their due diligence programs for assessing security risks.

Department of Defense 'Open Topic' program

The Secretary of Defense must establish the new innovation open topic program within 180 days of the law's enactment.

Agency reports on foreign influence

The Departments of Defense, Energy, Health and Human Services, and the National Science Foundation must report to Congress on foreign influence in their programs within 180 days.