Us Congress 2025-2026 Regular Session

Us Congress Senate Bill SB853 Latest Draft

Bill / Introduced Version Filed 03/26/2025

                            II 
119THCONGRESS 
1
STSESSION S. 853 
To improve the SBIR and STTR programs under the Small Business Act, 
and for other purposes. 
IN THE SENATE OF THE UNITED STATES 
MARCH5, 2025 
Ms. E
RNSTintroduced the following bill; which was read twice and referred 
to the Committee on Small Business and Entrepreneurship 
A BILL 
To improve the SBIR and STTR programs under the Small 
Business Act, and for other purposes. 
Be it enacted by the Senate and House of Representa-1
tives of the United States of America in Congress assembled, 2
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 3
(a) S
HORTTITLE.—This Act may be cited as the 4
‘‘Investing in National Next-Generation Opportunities for 5
Venture Acceleration and Technological Excellence’’ or the 6
‘‘INNOVATE Act’’. 7
(b) T
ABLE OFCONTENTS.—The table of contents for 8
this Act is as follows: 9
Sec. 1. Short title; table of contents. 
Sec. 2. Definitions. 
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TITLE I—PROMOTING TRANSITION FOR BATTLE-READY 
TECHNOLOGIES 
Sec. 101. Enhancing small business success in the STTR program. 
Sec. 102. Phase II strategic breakthrough funding. 
Sec. 103. Implementation briefings. 
Sec. 104. Fixed-price contracts. 
TITLE II—ENCOURAGING SMALL BUSINESS INNOVATION IN ALL 
OF AMERICA 
Sec. 201. Encouraging new SBIR and STTR entrants. 
Sec. 202. Combating discriminatory practices in the SBIR and STTR pro-
grams. 
TITLE III—STREAMLINING PARTICIPATION IN THE SBIR AND 
STTR PROGRAMS 
Sec. 301. Definition of open topics. 
Sec. 302. Reducing administrative burden. 
TITLE IV—PROTECTING AMERICAN INNOVATION FROM 
ADVERSARIAL INFLUENCE 
Sec. 401. Definition of foreign risk. 
Sec. 402. Bolstering research security of SBIR and STTR awards. 
Sec. 403. Strengthening the due diligence program to assess security risks. 
Sec. 404. Strengthening agency recovery authority. 
Sec. 405. Best practices on investor informational rights. 
Sec. 406. GAO report. 
TITLE V—SIMPLIFYING SBIR-STTR COMMERCIALIZATION 
STANDARDS 
Sec. 501. Streamlining transition and commercialization rate benchmarks. 
Sec. 502. Improving direct to Phase II authorities. 
Sec. 503. Improving SBIR-STTR data collection. 
Sec. 504. Streamlining program administration. 
Sec. 505. Extending SBIR and STTR authorization. 
SEC. 2. DEFINITIONS. 
1
In this Act, the terms ‘‘Phase I’’, ‘‘Phase II’’, ‘‘Phase 2
III’’, ‘‘SBIR’’, and ‘‘STTR’’ have the meanings given 3
those terms in section 9(e) of the Small Business Act (15 4
U.S.C. 638(e)). 5
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TITLE I—PROMOTING TRANSI-1
TION FOR BATTLE-READY 2
TECHNOLOGIES 3
SEC. 101. ENHANCING SMALL BUSINESS SUCCESS IN THE 4
STTR PROGRAM. 5
Section 9 of the Small Business Act (15 U.S.C. 638 6
et seq.) is amended— 7
(1) in subsection (e)— 8
(A) in paragraph (6)— 9
(i) in subparagraph (A), by adding 10
‘‘and’’ at the end; and 11
(ii) by striking subparagraphs (B) and 12
(C) and inserting the following: 13
‘‘(B) opportunities for follow-on funding in 14
Phases II and III of the SBIR program;’’; and 15
(B) in paragraph (7)— 16
(i) by striking ‘‘40’’ and inserting 17
‘‘50’’; and 18
(ii) by striking ‘‘30’’ and inserting 19
‘‘20’’; 20
(2) in subsection (f)(1)— 21
(A) in subparagraph (H), by striking 22
‘‘and’’ at the end; 23
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(B) in subparagraph (I), by striking ‘‘and 1
each fiscal year thereafter,’’ and inserting ‘‘; 2
and’’; and 3
(C) by adding at the end the following: 4
‘‘(J) not less than 3.45 percent of such 5
budget in fiscal year 2026 and every year there-6
after,’’; and 7
(3) in subsection (n)— 8
(A) in paragraph (1)(B)— 9
(i) in clause (iv), by striking ‘‘and’’ at 10
the end; 11
(ii) in clause (v), by striking ‘‘and 12
each fiscal year thereafter.’’ and inserting 13
‘‘; and’’; and 14
(iii) by adding at the end the fol-15
lowing: 16
‘‘(vi) not less than 0.20 percent for 17
fiscal year 2026 and each fiscal year there-18
after.’’; 19
(B) by redesignating paragraphs (2) and 20
(3) as paragraphs (3) and (4), respectively; and 21
(C) by inserting after paragraph (1) the 22
following: 23
‘‘(2) P
URPOSE OF STTR PROGRAM .— 24
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‘‘(A) IN GENERAL.—Each Federal agency 1
shall use its STTR budget to fund small busi-2
ness concerns conducting fundamental, basic, or 3
other scientific research that stands to benefit 4
most from partnerships with eligible research 5
institutions. 6
‘‘(B) D
OD AND NASA.—The Department 7
of Defense and the National Aeronautics and 8
Space Administration shall use their STTR 9
budget to solely fund research at technology 10
readiness levels 1, 2, and 3.’’. 11
SEC. 102. PHASE II STRATEGIC BREAKTHROUGH FUNDING. 12
(a) I
NGENERAL.—Section 9 of the Small Business 13
Act (15 U.S.C. 638), as amended by this Act, is amend-14
ed— 15
(1) by redesignating subsection (y) as para-16
graph (3), adjusting the margins accordingly, and 17
moving it so as to appear in subsection (ff) after 18
paragraph (2); 19
(2) in subsection (aa), by adding at the end the 20
following: 21
‘‘(6) S
TRATEGIC BREAKTHROUGH ALLOCA -22
TION.—The Department of Defense or its compo-23
nents shall not be required to receive a waiver from 24
the Administrator to award a small business concern 25
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not more than $30,000,000 when using funds made 1
available under a strategic breakthrough alloca-2
tion.’’; 3
(3) in subsection (ff)— 4
(A) in the subsection heading, by striking 5
‘‘
ANDSTTR’’ and inserting ‘‘PHASEII’’; 6
(B) in paragraph (1), by striking ‘‘or 7
Phase II STTR award’’; and 8
(C) in paragraph (3), as so redesignated— 9
(i) in the paragraph heading, by strik-10
ing ‘‘C
OMMERCIALIZATION READINESS 11
PROGRAM’’ and inserting ‘‘STRATEGIC 12
BREAKTHROUGH AWARDS ’’; 13
(ii) in subparagraph (A), as so redes-14
ignated— 15
(I) in the first sentence, by strik-16
ing ‘‘create and administer a ‘Com-17
mercialization Readiness Program’’’ 18
and inserting ‘‘provide funding’’; and 19
(II) in the second sentence, by 20
striking ‘‘create and administer a 21
Commercialization Program under 22
this subsection’’ and inserting ‘‘pro-23
vide funding under this paragraph’’; 24
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(iii) in subparagraph (B), as so redes-1
ignated— 2
(I) in the first sentence, by strik-3
ing ‘‘In carrying out the Commer-4
cialization Readiness Program’’ and 5
inserting the following: 6
‘‘(i) I
N GENERAL.—In carrying out 7
this paragraph’’; 8
(II) in clause (i), as so des-9
ignated— 10
(aa) by striking ‘‘shall iden-11
tify’’ and inserting ‘‘shall— 12
‘‘(I) identify’’; 13
(bb) in subclause (I), as so 14
designated, by striking the period 15
at the end and inserting a semi-16
colon; and 17
(cc) by adding at the end 18
the following: 19
‘‘(II) ensure, in collaboration 20
with SBIR program managers of each 21
component of the Department of De-22
fense, that research programs identi-23
fied under subclause (I) are analyzed 24
within the programming and budg-25
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eting process as budget requests are 1
developed; and 2
‘‘(III) provide to the Committee 3
on Small Business and Entrepreneur-4
ship of the Senate and the Commit-5
tees on Small Business and Science, 6
Space, and Technology of the House 7
of Representatives information on the 8
integration of SBIR and STTR 9
awardees in budget rollouts for re-10
search, development, testing, and eval-11
uation activities.’’; and 12
(III) by adding at the end the 13
following: 14
‘‘(ii) A
WARD.—Under this paragraph, 15
a funding agreement may be awarded to a 16
small business concern by the Department 17
of Defense using funds made available 18
under a strategic breakthrough allocation, 19
as defined in subparagraph (C)(i).’’; 20
(iv) by striking subparagraphs (C), 21
(D), and (E), as so redesignated, and in-22
serting the following: 23
‘‘(C) F
UNDING PARAMETERS .— 24
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‘‘(i) DEFINITION.—In this subpara-1
graph, the term ‘strategic breakthrough al-2
location’ means a required expenditure 3
amount for the Department of Defense 4
within the SBIR allocation under sub-5
section (f)(1) for fiscal year 2026 and 6
every fiscal year thereafter of not less than 7
0.25 percent of the extramural budget for 8
research or research and development des-9
ignated for the Department of Defense. 10
‘‘(ii) R
EQUIREMENTS.—In the case of 11
a Phase II agreement that is awarded to a 12
small business concern by the Department 13
of Defense using funds made available 14
under a strategic breakthrough allocation, 15
the following requirements shall apply: 16
‘‘(I) A
WARD SIZE AND PERIOD 17
OF PERFORMANCE .—The Department 18
of Defense may award not more than 19
1 award of not more than 20
$30,000,000 per small business con-21
cern, including its affiliates, spinouts, 22
or subsidiaries, from the strategic 23
breakthrough allocation with a period 24
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of performance of not more than 48 1
months. 2
‘‘(II) S
MALL BUSINESS CONCERN 3
REQUIREMENTS.—The small business 4
concern shall— 5
‘‘(aa) have been awarded not 6
less than 1 prior Phase II award 7
under the SBIR program; 8
‘‘(bb) demonstrate not less 9
than 100 percent matching funds 10
through new outside capital or 11
amounts awarded by the Depart-12
ment of Defense under a pro-13
gram other than Phase I and II 14
of the SBIR or STTR program 15
as a result of an award using 16
funds made available under a 17
strategic breakthrough allocation; 18
‘‘(cc) have been awarded not 19
more than $50,000,000 in cumu-20
lative Department of Defense 21
contracts or awards; and 22
‘‘(dd) only be eligible for an 23
award from the strategic break-24
through allocation if the product, 25
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process, or technology of the 1
small business concern— 2
‘‘(AA) meets a nec-3
essary level of readiness and 4
has a commitment for inclu-5
sion in a program objective 6
memorandum from an offi-7
cial with the rank of pro-8
gram executive officer or 9
higher in an acquisition or-10
ganization of the Depart-11
ment of Defense; 12
‘‘(BB) is an effective 13
solution, as determined by 14
market research; and 15
‘‘(CC) will meet high 16
priority military require-17
ments or operational needs 18
of a military department 19
through a successful transi-20
tion and into the acquisition 21
process. 22
‘‘(III) D
EADLINE.—The Depart-23
ment of Defense shall complete any 24
contract awards using strategic break-25
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through allocation funds not later 1
than 90 days after receiving a pro-2
posal from a small business concern 3
for the award. 4
‘‘(IV) E
LIGIBLE ACTIVITIES.— 5
Eligible activities by a small business 6
concern using strategic breakthrough 7
allocation funds are— 8
‘‘(aa) design for manufac-9
turing; 10
‘‘(bb) establishing manufac-11
turing facilities, tooling, and sup-12
ply chain capacity; 13
‘‘(cc) buying raw materials 14
or inventory; 15
‘‘(dd) the integration of 16
products with open interoper-17
ability standards; 18
‘‘(ee) testing, evaluation, 19
and certification of low-rate pro-20
duction units; and 21
‘‘(ff) the purchase of pro-22
duction units and maintenance. 23
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‘‘(V) SELECTION CRITERIA.—In 1
making awards, the Department of 2
Defense shall consider— 3
‘‘(aa) the potential of the 4
small business concern to— 5
‘‘(AA) advance the na-6
tional security capabilities of 7
the United States; 8
‘‘(BB) provide new 9
technologies or processes, or 10
new applications of existing 11
technologies, that will enable 12
new alternatives to existing 13
programs; 14
‘‘(CC) provide future 15
cost savings; and 16
‘‘(DD) enhance the 17
lethality and efficiency of 18
the United States military; 19
‘‘(bb) whether a major sys-20
tem or customer in the Depart-21
ment of Defense has expressed 22
intent to purchase and integrate 23
technology from the small busi-24
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ness concern into its operations; 1
and 2
‘‘(cc) such other criteria that 3
the Department of Defense deter-4
mines to be appropriate. 5
‘‘(D) A
CQUISITION MECHANISM .—The De-6
partment of Defense shall establish a mecha-7
nism, such as a major system, to provide small 8
business concerns with direct access to program 9
and requirements offices throughout the De-10
partment of Defense that may purchase tech-11
nology from small business concerns under 12
Phase III of the SBIR program of the Depart-13
ment of Defense. 14
‘‘(E) O
PERATIONAL NEEDS .—The Depart-15
ment of Defense shall allow services to provide 16
operational needs statements directly to chiefs 17
of requirements offices.’’; and 18
(v) in subparagraph (F), as so redes-19
ignated— 20
(I) by amending clause (i) to 21
read as follows: 22
‘‘(i) set a goal to substantively in-23
crease the number of Phase II SBIR con-24
tracts awarded by the Secretary that lead 25
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to technology transition into programs of 1
record or fielded systems in fiscal year 2
2028 compared to fiscal year 2025; and’’; 3
(II) by striking clause (ii); 4
(III) by redesignating clause (iii) 5
as clause (ii); and 6
(IV) in clause (ii), as so redesig-7
nated— 8
(aa) in subclause (I), by 9
adding ‘‘and’’ at the end; 10
(bb) in subclause (II)— 11
(AA) by striking 12
‘‘through the Commer-13
cialization Readiness Pro-14
gram’’ and inserting ‘‘under 15
a strategic breakthrough al-16
location’’; and 17
(BB) by striking ‘‘; 18
and’’ and inserting a period; 19
and 20
(cc) by striking subclause 21
(III); and 22
(4) by redesignating subsection (xx), entitled 23
‘‘Additional Provisions Relating to Solicitation Top-24
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ics’’, as subsection (y), and moving it so as to ap-1
pear after subsection (x). 2
(b) T
ECHNICAL ANDCONFORMINGAMENDMENTS.— 3
Section 9 of the Small Business Act (15 U.S.C. 638), as 4
amended by this Act, is amended— 5
(1) in subsection (i)(1), by striking ‘‘subsection 6
(y)’’ and inserting ‘‘subsection (ff)(3)’’; 7
(2) in subsection (mm)(1)(D), by striking ‘‘sub-8
section (y)’’ and inserting ‘‘subsection (ff)(3)’’; and 9
(3) in subsection (tt), by striking ‘‘(y)(6)(C)’’ 10
and inserting ‘‘(ff)(3)(F)(ii)’’. 11
SEC. 103. IMPLEMENTATION BRIEFINGS. 12
Not later than 60 days after the date of enactment 13
of this Act, and on a recurrent basis until implementation 14
is complete, the Secretary of Defense shall brief the Com-15
mittee on Small Business and Entrepreneurship of the 16
Senate and the Committee on Small Business and the 17
Committee on Science, Space, and Technology of the 18
House of Representatives on the implementation of para-19
graph (3) of section 9(ff) of the Small Business Act (15 20
U.S.C. 638(ff)), as added by section 102. 21
SEC. 104. FIXED-PRICE CONTRACTS. 22
Section 9 of the Small Business Act (15 U.S.C. 638) 23
is amended— 24
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(1) in subsection (f), by adding at the end the 1
following: 2
‘‘(5) F
IXED-PRICE CONTRACT.—Any funding 3
agreement that is a contract made with expenditures 4
allocated to the SBIR program under paragraph (1) 5
shall be a firm-fixed-price contract (as defined in 6
section 16.202 of the Federal Acquisition Regula-7
tion), unless, on a case-by-case basis, the head of the 8
awarding Federal agency makes a written deter-9
mination to utilize a different contract structure.’’; 10
and 11
(2) in subsection (n), as amended by section 12
101, by adding at the end the following: 13
‘‘(5) F
IXED-PRICE CONTRACT.—Any funding 14
agreement that is a contract made with expenditures 15
allocated to the STTR program under paragraph (1) 16
shall be a firm-fixed-price contract (as defined in 17
section 16.202 of the Federal Acquisition Regula-18
tion), unless the head of the awarding Federal agen-19
cy makes a written determination to utilize a dif-20
ferent contract structure.’’. 21
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TITLE II—ENCOURAGING SMALL 1
BUSINESS INNOVATION IN 2
ALL OF AMERICA 3
SEC. 201. ENCOURAGING NEW SBIR AND STTR ENTRANTS. 4
(a) I
NGENERAL.— 5
(1) E
NCOURAGING NEW SBIR AND STTR EN -6
TRANTS.—Section 9(jj) of the Small Business Act 7
(15 U.S.C. 638(jj)) is amended to read as follows: 8
‘‘(jj) E
NCOURAGINGNEWSBIR ANDSTTR EN-9
TRANTS.— 10
‘‘(1) O
PTIMIZING SBIR AND STTR FUNDING .—A 11
small business concern, including its affiliates, spin-12
outs, or subsidiaries, may not apply to a Phase I or 13
Phase II solicitation under an SBIR or STTR pro-14
gram if the small business concern, including its af-15
filiates, spinouts, or subsidiaries, has previously re-16
ceived over $75,000,000 in funding from SBIR or 17
STTR Phase I and Phase II awards. 18
‘‘(2) P
RIMARY INVESTIGATORS .—An individual 19
may not concurrently serve as the primary investi-20
gator on more than 1 proposal to a single Phase I 21
solicitation or a single Phase II solicitation. 22
‘‘(3) P
HASE I SIZE STANDARD .—A small busi-23
ness concern applying for a Phase I award may not 24
have annual receipts (as defined in section 121.104 25
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of title 13, Code of Federal Regulations, or any suc-1
cessor regulation) of more than $40,000,000 for the 2
most recent fiscal year.’’. 3
(2) C
ONFORMING AMENDMENT .—Section 4
9(tt)(1)(A) of the Small Business Act (15 U.S.C. 5
638(tt)(1)(A)) by striking ‘‘, (jj)(6)’’. 6
(b) P
HASE1A PROGRAM.—Section 9 of the Small 7
Business Act (15 U.S.C. 638), as amended by this Act, 8
is amended— 9
(1) in subsection (e)(4)— 10
(A) in subparagraph (A), by striking ‘‘sub-11
paragraph (B)’’ and inserting ‘‘subparagraph 12
(C)’’; 13
(B) by redesignating subparagraphs (B) 14
and (C) as subparagraphs (C) and (D); and 15
(C) by inserting after subparagraph (A), 16
the following: 17
‘‘(B) a 1A phase for the same purposes as 18
the first phase described under subparagraph 19
(A) and intended to increase accessibility to the 20
program for new entrants, with proposals sub-21
mitted pursuant to only SBIR open topic an-22
nouncements;’’; and 23
(2) by amending subsection (pp) to read as fol-24
lows: 25
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‘‘(pp) PHASE1A AWARDS.— 1
‘‘(1) S
ENSE OF CONGRESS .—It is the sense of 2
Congress that— 3
‘‘(A) Phase 1A funds will bring thousands 4
of new small business concerns committed to 5
commercialization of critical technologies into 6
the SBIR program; and 7
‘‘(B) in order for participating agencies to 8
benefit from the full scope of American innova-9
tion and identify the most promising solutions 10
to scale, Phase 1A awards should fund the 11
strongest technologies in a topic area regardless 12
of— 13
‘‘(i) the location of the small business 14
concern within the United States; or 15
‘‘(ii) the educational background of 16
the principal investigator. 17
‘‘(2) A
UTHORIZATION.—The head of each agen-18
cy with an SBIR program shall allocate not less 19
than 2.5 percent of funding for the SBIR program 20
of the agency to Phase 1A awards. 21
‘‘(3) S
OLICITATION.—A solicitation issued 22
under this subsection shall be conducted as an open 23
topic announcement, as defined in subsection (e). 24
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‘‘(4) ELIGIBILITY.—In order to be eligible for 1
an award under this subsection, a small business 2
concern, including its affiliates, spinouts, or subsidi-3
aries, shall not have previously received an SBIR or 4
STTR award. 5
‘‘(5) P
ROPOSAL.— 6
‘‘(A) I
N GENERAL.—A proposal submitted 7
in response to a solicitation under this sub-8
section shall consist of a report of no more than 9
2 pages in length and shall contain the criteria 10
described in subparagraph (B). 11
‘‘(B) C
RITERIA.— 12
‘‘(i) I
DENTIFICATION OF PROBLEM .— 13
The small business concern shall describe 14
the problem that the proposal is intended 15
to address for the awarding agency and 16
any commercial customer. 17
‘‘(ii) D
ESCRIPTION OF SOLUTION .— 18
The small business concern shall describe 19
the proposed solution, including the tech-20
nical basis for the solution to demonstrate 21
how the solution would address the prob-22
lem described in the proposal, including 23
the level of maturity of the solution at the 24
time of the proposal. 25
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‘‘(iii) IMPACT OF THE SOLUTION .— 1
The small business concern shall describe 2
how adoption of the proposed solution 3
would produce potential time savings, cost 4
savings, risk reduction, improvement of 5
mission outcomes, or any other beneficial 6
impact for the awarding agency and any 7
commercial customer. 8
‘‘(iv) D
IFFERENTIATION.—The small 9
business concern shall— 10
‘‘(I) identify the state of solu-11
tions in use at the time of the pro-12
posal to address the problem de-13
scribed in the proposal; and 14
‘‘(II) explain how the proposed 15
solution is a unique and novel solu-16
tion. 17
‘‘(v) C
OMMERCIALIZATION STRAT -18
EGY.—The small business concern shall— 19
‘‘(I) describe how the small busi-20
ness concern intends to fund the pro-21
posed solution; and 22
‘‘(II) explain the market for the 23
proposed solution, including the in-24
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tended Government and commercial 1
end users. 2
‘‘(6) A
WARD LIMITS.— 3
‘‘(A) N
UMBER OF AWARDS .—A small busi-4
ness concern or principal investigator is eligible 5
for not more than 1 Phase 1A award. 6
‘‘(B) A
MOUNT.—An award made under 7
this subsection shall be for not more than 8
$40,000. 9
‘‘(7) N
OTIFICATION OF SELECTION OR NON -SE-10
LECTION.—Each agency shall notify each small busi-11
ness concern of the award decision of the agency on 12
any proposal submitted by the small business con-13
cern not later than 90 days after the date on which 14
the solicitation closes. 15
‘‘(8) A
PPLICATION FOR PHASE II AWARD .— 16
‘‘(A) E
LIGIBILITY.—A small business con-17
cern that receives a Phase 1A award shall be el-18
igible to apply for a Phase II award. 19
‘‘(B) U
SE OF FUNDS.—A small business 20
concern may use funds from a Phase 1A award 21
to develop a proposed solution in pursuit of a 22
subsequent proposal for a Phase I award or a 23
Phase II award.’’. 24
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SEC. 202. COMBATING DISCRIMINATORY PRACTICES IN 1
THE SBIR AND STTR PROGRAMS. 2
Section 9 of the Small Business Act (15 U.S.C. 638), 3
as amended by this Act, is amended— 4
(1) in subsection (b)(7)(C), by striking ‘‘owned 5
and controlled by women or by socially and economi-6
cally disadvantaged individuals’’ and inserting 7
‘‘owned by individuals who reside in emerging States 8
or rural areas’’; 9
(2) in subsection (e)— 10
(A) in paragraph (18), by striking ‘‘and’’ 11
at the end; 12
(B) in paragraph (19), by striking the pe-13
riod at the end and inserting a semicolon; and 14
(C) by adding at the end the following: 15
‘‘(20) the term ‘emerging State’ means the 25 16
States with the fewest combined number of award 17
recipients in the SBIR program and the STTR pro-18
gram that have received their first Phase I award in 19
the previous 10 fiscal years; 20
‘‘(21) the term ‘rural area’ means a county or 21
other political subdivision of a State that the Bureau 22
of the Census has defined as mostly rural or com-23
pletely rural in the most recent decennial census;’’; 24
(3) in subsection (g)(8)(A)— 25
(A) by striking clause (iii); 26
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(B) by redesignating clauses (iv), (v), and 1
(vi) as clauses (iii), (iv), and (v), respectively; 2
and 3
(C) in clause (iii), as so redesignated, by 4
striking ‘‘a socially or economically disadvan-5
taged individual or has a socially or economi-6
cally disadvantaged individual’’ and inserting 7
‘‘an individual who resides in an emerging State 8
or rural area or has an individual who resides 9
in an emerging State or rural area’’; 10
(4) in subsection (j)— 11
(A) by adjusting the margins for para-12
graphs (2) and (3) 2 ems to the left; and 13
(B) in paragraph (2)— 14
(i) by striking subparagraph (F); 15
(ii) by redesignating subparagraphs 16
(G), (H), and (I) as subparagraphs (F), 17
(G), and (H); and 18
(iii) in subparagraph (H), as so redes-19
ignated, by striking ‘‘subparagraph (H)’’ 20
and inserting ‘‘subparagraph (G)’’; 21
(5) in subsection (k)(1)(F)— 22
(A) by striking clause (ii); 23
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(B) by redesignating clauses (iii), (iv), and 1
(v) as clauses (ii), (iii), and (iv), respectively; 2
and 3
(C) in clause (ii), as so redesignated, by 4
striking ‘‘a socially or economically disadvan-5
taged individual or has a socially or economi-6
cally disadvantaged individual’’ and inserting 7
‘‘an individual who resides in an emerging State 8
or rural area or has an individual who resides 9
in an emerging State or rural area’’; 10
(6) in subsection (o)(9)(A)— 11
(A) by striking clause (iii); 12
(B) by redesignating clauses (iv), (v), and 13
(vi) as clauses (iii), (iv), and (v), respectively; 14
and 15
(C) in clause (iii), as so redesignated, by 16
striking ‘‘a socially or economically disadvan-17
taged individual or has a socially or economi-18
cally disadvantaged individual’’ and inserting 19
‘‘an individual who resides in an emerging State 20
or rural area or has an individual who resides 21
in an emerging State or rural area’’; and 22
(7) in subsection (mm)— 23
(A) in paragraph (1)— 24
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(i) in the matter preceding subpara-1
graph (A), by striking ‘‘and until Sep-2
tember 30, 2025’’; and 3
(ii) in subparagraph (F), by striking 4
‘‘or abuse to ensure compliance’’ and in-5
serting ‘‘abuse, or adversarial influence to 6
ensure compliance’’; 7
(B) in paragraph (2)(A), by striking ‘‘to 8
carry out the policy directive required under 9
subsection (j)(2)(F) and’’ and inserting ‘‘to in-10
crease the participation of States with respect 11
to which a low level of SBIR awards have his-12
torically been awarded’’; and 13
(C) by adding at the end the following: 14
‘‘(7) E
LIGIBILITY.—For an agency to be eligi-15
ble to utilize funds allocated to the SBIR program 16
of that Federal agency under this subsection, the 17
agency shall not— 18
‘‘(A) consider the race, gender, or ethnicity 19
of the principal investigator, founder, or key 20
personnel of the small business concern apply-21
ing for an SBIR or STTR award in an award 22
decision under the SBIR or STTR program of 23
the agency; 24
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‘‘(B) require or consider a statement or 1
plan to promote diversity or equity as part of 2
an application for an SBIR or STTR award 3
under the SBIR or STTR program of the agen-4
cy; or 5
‘‘(C) offer supplemental funds to a recipi-6
ent of an SBIR or STTR award based on the 7
race, gender, or ethnicity of the principal inves-8
tigator, founder, or key personnel of a small 9
business concern.’’. 10
TITLE III—STREAMLINING PAR-11
TICIPATION IN THE SBIR AND 12
STTR PROGRAMS 13
SEC. 301. DEFINITION OF OPEN TOPICS. 14
Section 9(e) of the Small Business Act (15 U.S.C. 15
638(e)), as amended by section 202(2), is amended by 16
adding at the end the following: 17
‘‘(22) the term ‘open topic announcement’ 18
means a solicitation for SBIR or STTR proposals 19
that— 20
‘‘(A) is a generalized problem statement or 21
broad technology area and does not contain any 22
language requiring that the solutions that a 23
small business concern proposes adhere to spe-24
cific technological specifications; and 25
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‘‘(B) evaluates the ability of the solution 1
proposed by the small business concern to meet 2
the stated innovation need of the agency or 3
Government end user; and’’. 4
SEC. 302. REDUCING ADMINISTRATIVE BURDEN. 5
Section 9(jj) of the Small Business Act (15 U.S.C. 6
638(jj)), as amended by section 201(a)(1), is amended by 7
adding at the end the following: 8
‘‘(4) R
EDUCING ADMINISTRATIVE BURDEN .— 9
‘‘(A) L
IMIT ON SUBMISSIONS TO A SOLICI -10
TATION.—A small business concern, including 11
its affiliates, spinouts, or subsidiaries, may not 12
submit more than 3 proposals to a single Phase 13
I solicitation or a single Phase II solicitation 14
under subsection (cc). 15
‘‘(B) L
IMIT ON SUBMISSIONS IN A SINGLE 16
YEAR.—A small business concern, including its 17
affiliates, spinouts, or subsidiaries, may not 18
submit more than a combined total of 25 pro-19
posals to Phase I solicitations or Phase II so-20
licitations under subsection (cc) published by a 21
single agency, including the components of the 22
agency, in a single fiscal year.’’. 23
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TITLE IV—PROTECTING AMER-1
ICAN INNOVATION FROM AD-2
VERSARIAL INFLUENCE 3
SEC. 401. DEFINITION OF FOREIGN RISK. 4
Section 9(e) of the Small Business Act (15 U.S.C. 5
638(e)), as amended by section 301, is amended by adding 6
at the end the following: 7
‘‘(23) the term ‘foreign risk’ means, in the past 8
10 years, any foreign affiliation, technology licensing 9
agreement, joint venture, contractual or financial ob-10
ligation (pending or otherwise), investment agree-11
ment, research relationship (including co-author-12
ship), or business relationship between— 13
‘‘(A) a small business concern (including 14
all subsidiaries, spinouts, and affiliates) submit-15
ting a proposal for an SBIR or STTR program, 16
and covered individuals, owners, or other key 17
personnel of the small business concern; and 18
‘‘(B) an individual, research institution, 19
business entity, government, or government- 20
owned entity in a foreign country of concern 21
that is disclosed, as required under subsection 22
(g) or subsection (o), or otherwise identified in 23
the due diligence process, as required under 24
subsection (vv).’’. 25
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SEC. 402. BOLSTERING RESEARCH SECURITY OF SBIR AND 1
STTR AWARDS. 2
Section 9 of the Small Business Act (15 U.S.C. 638), 3
as amended by this Act, is amended— 4
(1) in subsection (g)— 5
(A) by redesignating paragraphs (15), 6
(16), and (17) as paragraphs (16), (18) and 7
(19), respectively; 8
(B) by inserting after paragraph (14) the 9
following: 10
‘‘(15) evaluate whether a small business con-11
cern presents a risk to national security for any rea-12
son, through measures including— 13
‘‘(A) the due diligence process required 14
under subsection (vv); 15
‘‘(B) disclosures submitted under this sub-16
section; or 17
‘‘(C) coordination with the Inspector Gen-18
eral of the agency or the intelligence community 19
(as defined under section 3 of the National Se-20
curity Act of 1947 (50 U.S.C. 3003));’’; 21
(C) in paragraph (16), as so redesig-22
nated— 23
(i) by striking subparagraph (B); 24
(ii) by striking ‘‘that—’’ and all that 25
follows through ‘‘the small business con-26
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•S 853 IS
cern submitting’’ and inserting ‘‘that the 1
small business concern submitting’’; 2
(iii) by redesignating clauses (i), (ii), 3
and (iii) as subparagraphs (A), (B), and 4
(C), respectively, and adjusting the mar-5
gins accordingly; 6
(iv) in subparagraph (B), as so redes-7
ignated, by striking ‘‘or’’ at the end; 8
(v) in subparagraph (C), as so redes-9
ignated, by striking ‘‘and’’ at the end; and 10
(vi) by adding at the end the fol-11
lowing: 12
‘‘(D) has a foreign risk connecting the 13
small business concern to an entity, including 14
any affiliates, spinouts, or subsidiaries of the 15
entity, or individual on one or more of the fol-16
lowing lists: 17
‘‘(i) the UFLPA Entity List main-18
tained by the Department of Homeland Se-19
curity; 20
‘‘(ii) the Non-SDN Chinese Military- 21
Industrial Complex Companies List of the 22
Office of Foreign Assets Control main-23
tained by the Department of the Treasury; 24
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‘‘(iii) the Section 889 Prohibition List 1
established under section 889 of the John 2
S. McCain National Defense Authorization 3
Act for Fiscal Year 2019 (Public Law 4
115–232) and maintained by the Depart-5
ment of Defense; 6
‘‘(iv) the list of Chinese Military com-7
panies required under section 1260H of 8
the William M. (Mac) Thornberry National 9
Defense Authorization Act for Fiscal Year 10
2021 (Public Law 116–283) and main-11
tained by the Department of Defense; 12
‘‘(v) the Military End User List main-13
tained by the Bureau of Industry and Se-14
curity of the Department of Commerce; 15
‘‘(vi) the Entity List maintained by 16
the Bureau of Industry and Security of the 17
Department of Commerce; 18
‘‘(vii) the List of Equipment and 19
Services maintained by the Federal Com-20
munications Commission; and 21
‘‘(viii) the Withhold Release Orders 22
and Findings List maintained by U.S. 23
Customs and Border Protection; 24
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‘‘(E) has a foreign risk with a primary 1
source that is classified; or 2
‘‘(F) has a foreign risk or another national 3
security risk not listed in statute or regulatory 4
guidance that an agency determines warrants a 5
denial;’’; 6
(D) by inserting after paragraph (16), as 7
so redesignated, the following: 8
‘‘(17) not, and any personnel of the Federal 9
agency including technical points of contact shall 10
not, communicate to an applicant prior to formal no-11
tification of an award decision that an application 12
was denied due to a foreign risk;’’; and 13
(E) in paragraph (19), as so redesig-14
nated— 15
(i) in subparagraph (B), by striking 16
‘‘(16)(A)’’ and inserting ‘‘(18)(A)’’; and 17
(ii) in subparagraph (C), by striking 18
‘‘(16)(B)’’ and inserting ‘‘(18)(B)’’; and 19
(2) in subsection (o)— 20
(A) by redesignating paragraphs (19), 21
(20), and (21) as paragraphs (20), (22) and 22
(23), respectively; 23
(B) by inserting after paragraph (18) the 24
following: 25
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‘‘(19) evaluate whether a small business con-1
cern presents a risk to national security for any rea-2
son, through measures including— 3
‘‘(A) the due diligence process required 4
under subsection (vv); 5
‘‘(B) disclosures submitted under this sub-6
section; or 7
‘‘(C) coordination with the Inspector Gen-8
eral of the agency or the intelligence community 9
(as defined under section 3 of the National Se-10
curity Act of 1947 (50 U.S.C. 3003));’’; 11
(C) in paragraph (20), as so redesig-12
nated— 13
(i) by striking subparagraph (B); 14
(ii) by striking ‘‘that—’’ and all that 15
follows through ‘‘the small business con-16
cern submitting’’ and inserting ‘‘that the 17
small business concern submitting’’; 18
(iii) by redesignating clauses (i), (ii), 19
and (iii) as subparagraphs (A), (B), and 20
(C), respectively, and adjusting the mar-21
gins accordingly; 22
(iv) in subparagraph (B), as so redes-23
ignated, by striking ‘‘or’’ at the end; 24
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(v) in subparagraph (C), as so redes-1
ignated, by striking ‘‘and’’ at the end; and 2
(vi) by adding at the end the fol-3
lowing: 4
‘‘(D) has a foreign risk connecting the 5
small business concern to an entity, including 6
any affiliates, spinouts, or subsidiaries of the 7
entity, or individual on one or more of the fol-8
lowing lists: 9
‘‘(i) the UFLPA Entity List main-10
tained by the Department of Homeland Se-11
curity; 12
‘‘(ii) the Non-SDN Chinese Military- 13
Industrial Complex Companies List of the 14
Office of Foreign Assets Control main-15
tained by the Department of the Treasury; 16
‘‘(iii) the Section 889 Prohibition List 17
established under section 889 of the John 18
S. McCain National Defense Authorization 19
Act for Fiscal Year 2019 (Public Law 20
115–232) and maintained by the Depart-21
ment of Defense; 22
‘‘(iv) the list of Chinese Military com-23
panies required under section 1260H of 24
the William M. (Mac) Thornberry National 25
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Defense Authorization Act for Fiscal Year 1
2021 (Public Law 116–283) and main-2
tained by the Department of Defense; 3
‘‘(v) the Military End User List main-4
tained by the Bureau of Industry and Se-5
curity of the Department of Commerce; 6
‘‘(vi) the Entity List maintained by 7
the Bureau of Industry and Security of the 8
Department of Commerce; 9
‘‘(vii) the List of Equipment and 10
Services maintained by the Federal Com-11
munications Commission; and 12
‘‘(viii) the Withhold Release Orders 13
and Findings List maintained by U.S. 14
Customs and Border Protection; 15
‘‘(E) has a foreign risk with a primary 16
source that is classified; or 17
‘‘(F) has a foreign risk or another national 18
security risk not listed in statute or regulatory 19
guidance that an agency determines warrants a 20
denial;’’; 21
(D) by inserting after paragraph (20) the 22
following: 23
‘‘(21) not, and any personnel of the Federal 24
agency including technical points of contact shall 25
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not, communicate to an applicant prior to formal no-1
tification of an award decision that an application 2
was denied due to a foreign risk;’’; and 3
(E) in paragraph (23), as so redesig-4
nated— 5
(i) in subparagraph (B), by striking 6
‘‘(20)(A)’’ and inserting ‘‘(22)(A)’’; and 7
(ii) in subparagraph (C), by striking 8
‘‘(20)(B)’’ and inserting ‘‘(22)(B)’’. 9
SEC. 403. STRENGTHENING THE DUE DILIGENCE PROGRAM 10
TO ASSESS SECURITY RISKS. 11
Section 9(vv)(2) of the Small Business Act (15 12
U.S.C. 638(vv)(2)) is amended— 13
(1) in subparagraph (B), by striking the period 14
at the end and inserting ‘‘; and’’; and 15
(2) by adding at the end the following: 16
‘‘(C) examine any relationship of a small 17
business concern seeking an award to any entity 18
or individual included on the lists, as published 19
on the date of the closing of the solicitation, de-20
scribed under subsections (g)(16)(D) and 21
(o)(20)(D).’’. 22
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SEC. 404. STRENGTHENING AGENCY RECOVERY AUTHOR-1
ITY. 2
Section 9 of the Small Business Act (15 U.S.C. 638), 3
as amended by this Act, is amended— 4
(1) in subsection (g)(18), as redesignated by 5
section 402— 6
(A) in the matter preceding subparagraph 7
(A), by inserting ‘‘, as adjusted for inflation ac-8
cording to the Consumer Price Index published 9
by the Bureau of Labor Statistics,’’ after 10
‘‘amounts’’; 11
(B) in subparagraph (A)— 12
(i) by inserting ‘‘during the 10-year 13
period beginning on the date of the award, 14
or during a longer or indefinite period as 15
determined by the head of the awarding 16
agency as necessary for national security,’’ 17
before ‘‘the small business concern’’; and 18
(ii) by striking ‘‘or’’ at the end; 19
(C) in subparagraph (B)— 20
(i) by inserting ‘‘during the 10-year 21
period beginning on the date of the award, 22
or during a longer or indefinite period as 23
determined by the head of the awarding 24
agency as necessary for national security,’’ 25
before ‘‘there is a change’’; and 26
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(ii) by striking ‘‘and’’ at the end; and 1
(D) by adding at the end the following: 2
‘‘(C) during the 5-year period beginning on 3
the date of the award, or during a longer or in-4
definite period as determined by the head of the 5
awarding agency as necessary for national secu-6
rity, the small business concern sells, leases, or 7
provides (through joint research, technological 8
licensing, or otherwise) intellectual property 9
that was developed, wholly or in part, using an 10
SBIR award to a foreign entity or individual 11
unless the foreign entity or individual is incor-12
porated in or a citizen of a country that is a 13
member of the North Atlantic Treaty Organiza-14
tion or a major non-NATO ally, as described 15
under section 2321k of title 22, United States 16
Code; or 17
‘‘(D) during the 10-year period beginning 18
on the date of the award, or during a longer or 19
indefinite period as determined by the head of 20
the awarding agency as necessary for national 21
security, the small business concern sells, 22
leases, or provides (through joint research, tech-23
nological licensing, or otherwise) intellectual 24
property that was developed, wholly or in part, 25
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using an SBIR award to an entity, government, 1
or individual in a foreign country of concern; 2
and’’; and 3
(2) in subsection (o)(22), as redesignated by 4
section 402— 5
(A) in the matter preceding subparagraph 6
(A), by inserting ‘‘, as adjusted for inflation ac-7
cording to the Consumer Price Index published 8
by the Bureau of Labor Statistics,’’ after 9
‘‘amounts’’; 10
(B) in subparagraph (A)— 11
(i) by inserting ‘‘during the 10-year 12
period beginning on the date of the award, 13
or during a longer or indefinite period as 14
determined by the head of the awarding 15
agency as necessary for national security,’’ 16
before ‘‘the small business concern’’; and 17
(ii) by striking ‘‘or’’ at the end; 18
(C) in subparagraph (B)— 19
(i) by inserting ‘‘during the 10-year 20
period beginning on the date of the award, 21
or during a longer or indefinite period as 22
determined by the head of the awarding 23
agency as necessary for national security,’’ 24
before ‘‘there is a change’’; and 25
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(ii) by striking ‘‘and’’ at the end; and 1
(D) by adding at the end the following: 2
‘‘(C) during the 5 year period beginning on 3
the date of the award, or during a longer or in-4
definite period as determined by the head of the 5
awarding agency as necessary for national secu-6
rity, the small business concern sells, leases, or 7
provides (through joint research, technological 8
licensing, or otherwise) intellectual property 9
that was developed, wholly or in part, using an 10
STTR award to a foreign entity or individual 11
unless the foreign entity or individual is incor-12
porated in or a citizen of a country that is a 13
member of the North Atlantic Treaty Organiza-14
tion or a major non-NATO ally, as described 15
under section 2321k of title 22, United States 16
Code; or 17
‘‘(D) during the 10-year period beginning 18
on the date of the award, or during a longer or 19
indefinite period as determined by the head of 20
the awarding agency as necessary for national 21
security, the small business concern sells, 22
leases, or provides (through joint research, tech-23
nological licensing, or otherwise) intellectual 24
property that was developed, wholly or in part, 25
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using an STTR award to an entity, govern-1
ment, or individual in a foreign country of con-2
cern; and’’. 3
SEC. 405. BEST PRACTICES ON INVESTOR INFORMATIONAL 4
RIGHTS. 5
Section 9(uu) of the Small Business Act (15 U.S.C. 6
638(uu)) is amended to read as follows: 7
‘‘(uu) B
ESTPRACTICES ON INVESTORINFORMA-8
TIONALRIGHTS.— 9
‘‘(1) I
N GENERAL.—The Administrator, in co-10
ordination with the heads of all agencies with an 11
SBIR program, the Director of the White House Of-12
fice of Science and Technology Policy, and the Com-13
mittee on Foreign Investment in the United States, 14
shall develop best practices to be shared with each 15
recipient of an SBIR or STTR award by the agency 16
granting the award. 17
‘‘(2) C
ONTENTS.—The best practices developed 18
under paragraph (1) shall include recommendations 19
for protecting the proprietary technology and intel-20
lectual property of the small business concern from 21
being shared unintentionally to foreign individuals 22
and entities through informational rights of limited 23
partners in venture capital, hedge fund, or private 24
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equity firms that have investments in SBIR or 1
STTR recipients.’’. 2
SEC. 406. GAO REPORT. 3
Paragraph (4) of section 4(b) of the SBIR and STTR 4
Extension Act of 2022 (Public Law 117–183; 136 Stat. 5
2194) is amended to read as follows: 6
‘‘(4) GAO 
REPORT.— 7
‘‘(A) I
N GENERAL.—Not later than 1 year 8
after the date of enactment of the INNOVATE 9
Act, and annually thereafter for 3 years, the 10
Comptroller General of the United States shall 11
conduct a study and submit to the Committee 12
on Small Business and Entrepreneurship and 13
the Committee on Armed Services of the Senate 14
and the Committee on Small Business, the 15
Committee on Armed Services, and the Com-16
mittee on Science, Space, and Technology of 17
the House of Representatives a report on the 18
implementation and best practices of the due 19
diligence programs established under section 20
9(vv) of the Small Business Act (15 U.S.C. 21
638(vv)) across Federal agencies required to es-22
tablish an SBIR or STTR program. 23
‘‘(B) S
TUDY.—The study shall evaluate— 24
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‘‘(i) the effectiveness of each Federal 1
agency that participates in the SBIR pro-2
gram or STTR program in identifying— 3
‘‘(I) enhanced risk in cybersecu-4
rity practices in SBIR and STTR 5
projects; 6
‘‘(II) enhanced risk in patents, 7
including co-authorship with aca-8
demics in foreign countries of concern 9
in SBIR and STTR projects; 10
‘‘(III) enhanced foreign influence 11
risk among employees of small busi-12
ness concerns involved in SBIR and 13
STTR projects; 14
‘‘(IV) foreign ownership of a 15
small business concern seeking an 16
award, including the financial ties and 17
obligations (which shall include sur-18
ety, equity, and debt obligations) in 19
SBIR and STTR projects; and 20
‘‘(V) security risks among appli-21
cants to the SBIR program or the 22
STTR program, including connections 23
to an entity, including any affiliates, 24
spinouts, or subsidiaries of the entity, 25
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or individual on one or more of the 1
lists referenced in subsection 2
(g)(16)(D); 3
‘‘(ii) by year, the number of proposals 4
and number of small business concerns 5
with foreign risks by each Federal agency 6
that participates in the SBIR program or 7
STTR program, including a delineation of 8
how many of those small business concerns 9
have previously received an award under 10
the SBIR program or STTR program and 11
the nature of those foreign risks made by 12
each Federal agency; and 13
‘‘(iii) the extent to which the Inspec-14
tor General and counterintelligence au-15
thorities of each Federal agency that par-16
ticipates in the SBIR or STTR program 17
effectively conducts investigations, audits, 18
inspections, and outreach relating to the 19
due diligence program to assess security 20
risks in the SBIR or STTR program.’’. 21
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TITLE V—SIMPLIFYING SBIR- 1
STTR COMMERCIALIZATION 2
STANDARDS 3
SEC. 501. STREAMLINING TRANSITION AND COMMER-4
CIALIZATION RATE BENCHMARKS. 5
Section 9(qq) of the Small Business Act (15 U.S.C. 6
638(qq)) is amended— 7
(1) by amending paragraph (1)(A)(ii) to read 8
as follows: 9
‘‘(ii) for small business concerns that 10
received or receive more than 10 Phase I 11
awards, establish a minimum performance 12
standard with respect to the receipt of 13
Phase II awards that shall be a ratio of at 14
least 0.25 for the number of Phase II 15
awards received as compared to the num-16
ber of Phase I awards received; and’’; and 17
(2) in paragraph (3)— 18
(A) in subparagraph (A), by striking 19
clauses (i) and (ii) and inserting the following: 20
‘‘(i) I
N GENERAL.—With respect to a 21
small business concern that received or re-22
ceives more than 25 Phase I awards, the 23
minimum performance standard shall be a 24
ratio of at least 0.5 for the number of 25
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Phase II awards received as compared to 1
the number of Phase I awards received. 2
‘‘(ii) C
ONSEQUENCE OF FAILURE TO 3
MEET STANDARD.—If the head of a Fed-4
eral agency determines that a small busi-5
ness concern is not meeting the applicable 6
increased minimum performance standard 7
established under clause (i), such small 8
business concern may not participate in 9
Phase I of the SBIR or STTR program of 10
that agency during the 1-year period be-11
ginning on the date on which such deter-12
mination is made and the small business 13
concern may not receive more than 5 total 14
Phase I awards from that agency during 15
each 1-year period thereafter until the 16
small business concern surpasses the min-17
imum performance standard established 18
under clause (i).’’; and 19
(B) in subparagraph (B)— 20
(i) in clause (i), by striking subclauses 21
(I) and (II) and inserting the following: 22
‘‘(I) with respect to a small busi-23
ness concern, including its affiliates, 24
spinouts, and subsidiaries, that has 25
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received more than 25 Phase II 1
awards over its lifetime, require the 2
sum of the annual receipts (as defined 3
in section 121.104 of title 13, Code of 4
Federal Regulations, or any successor 5
regulation) of the small business con-6
cern from sources other than Phase I 7
or Phase II SBIR or STTR awards 8
and investments received by the small 9
business concern to at minimum ex-10
ceed the sum of the dollars awarded 11
through Phase I and Phase II awards 12
since the date of the first such award; 13
and 14
‘‘(II) with respect to a small 15
business concern, including its affili-16
ates, spinouts, and subsidiaries, that 17
receives more than 25 Phase II 18
awards over its lifetime, require a 19
minimum of 65 percent of the sum of 20
the annual receipts (as defined in sec-21
tion 121.104 of title 13, Code of Fed-22
eral Regulations, or any successor 23
regulation) of the small business con-24
cern and investments received by the 25
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small business concern during the 3 1
years preceding the most recent fiscal 2
year come from sources other than 3
Phase I or Phase II SBIR or STTR 4
awards.’’; and 5
(ii) by amending clause (ii) to read as 6
follows: 7
‘‘(ii) C
ONSEQUENCE OF FAILURE TO 8
MEET STANDARD.—If the head of a Fed-9
eral agency determines that a small busi-10
ness concern is not meeting an applicable 11
increased minimum performance standard 12
modified under clause (i), the small busi-13
ness concern may not apply for additional 14
Phase I awards or Phase II awards until 15
the small business concern has received 16
enough annual receipts from sources other 17
than an SBIR or STTR program to sur-18
pass the minimum performance standard 19
established under clause (i).’’. 20
SEC. 502. IMPROVING DIRECT TO PHASE II AUTHORITIES. 21
Section 9(cc) of the Small Business Act (15 U.S.C. 22
638(cc)) is amended to read as follows: 23
‘‘(cc) P
HASEFLEXIBILITY.— 24
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‘‘(1) AWARDING A PHASE II AWARD ABSENT A 1
PHASE I AWARD.—Each agency with an SBIR pro-2
gram may provide to a small business concern an 3
award under Phase II of the SBIR program with re-4
spect to a project, without regard to whether the 5
small business concern was provided an award under 6
Phase I of an SBIR program with respect to such 7
project, if the head of the agency determines that 8
the small business concern has completed the deter-9
minations described in subsection (e)(4)(A) with re-10
spect to such project despite not having been pro-11
vided a Phase I award. 12
‘‘(2) L
IMITATIONS ON AWARDS.— 13
‘‘(A) I
N GENERAL.—Except as provided in 14
subparagraph (B), the head of each agency with 15
an SBIR program may award not more than 10 16
percent of the funds allocated for the SBIR 17
program of the agency in a given fiscal year 18
under the authority of this subsection. 19
‘‘(B) N
ATIONAL INSTITUTES OF HEALTH 20
AND DEPARTMENT OF DEFENSE .—The Director 21
of the National Institutes of Health may award 22
not more than 30 percent of the funds allocated 23
for the SBIR program of the National Insti-24
tutes of Health in a given fiscal year and the 25
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Secretary of Defense may award not more than 1
30 percent of the funds allocated for the SBIR 2
program of each component in the Department 3
of Defense in a given fiscal year under the au-4
thority of this subsection. 5
‘‘(C) L
IMIT ON ELIGIBILITY FOR 6
AWARDS.—An agency may not make an award 7
under this subsection to a small business con-8
cern, including its affiliates, spinouts, and sub-9
sidiaries, that has received more than 25 Phase 10
II awards. 11
‘‘(D) L
IMIT ON NUMBER OF AWARDS .—An 12
agency may make not more than 25 awards 13
under this subsection to a small business con-14
cern, including its affiliates, spinouts, and sub-15
sidiaries.’’. 16
SEC. 503. IMPROVING SBIR-STTR DATA COLLECTION. 17
(a) A
DDITIONALDATAFIELDS INSBIR DATA-18
BASE.—Section 9(k)(1) of the Small Business Act (15 19
U.S.C. 638(k)(1)) is amended— 20
(1) in subparagraph (E)(iv), by striking ‘‘and’’ 21
at the end; 22
(2) in subparagraph (F)(v), by striking the pe-23
riod at the end and inserting ‘‘; and’’; and 24
(3) by adding at the end the following: 25
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‘‘(G) for each award granted, whether the 1
award is classified or designated as— 2
‘‘(i) Phase 1A, under subsection (pp); 3
‘‘(ii) direct to Phase II, under sub-4
section (cc); 5
‘‘(iii) subsequent Phase II, under sub-6
section (bb)(1); 7
‘‘(iv) strategic breakthrough award 8
under subsection (ff)(3); 9
‘‘(v) Phase III prime contract award; 10
or 11
‘‘(vi) Phase III subcontract award.’’. 12
(b) I
MPROVINGFPDS DATATRACKING.— 13
(1) I
N GENERAL.—The Administrator of Gen-14
eral Services shall update the Federal Procurement 15
Data System described in section 1122(a)(4) of title 16
41, United States Code, or any successor system, 17
to— 18
(A) require reporting on whether an award 19
under the SBIR or STTR program is classified 20
or designated as— 21
(i) Phase 1A, under subsection (pp) of 22
section 9 of the Small Business Act (15 23
U.S.C. 638), as amended by this Act; 24
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(ii) direct to Phase II, under sub-1
section (cc) of such section; 2
(iii) subsequent Phase II, under sub-3
section (bb)(1) of such section; 4
(iv) a strategic breakthrough award 5
under subsection (ff)(3) of such section; 6
(v) a Phase III prime contract award; 7
or 8
(vi) a Phase III subcontract award; 9
(B) require reporting on whether a con-10
tract is designated as a Phase III contract; and 11
(C) allow a Government contracting offi-12
cer, when recording a Phase II or Phase III 13
contract following on from work done by a 14
small business concern during a Phase I or 15
Phase II award to reference an SBIR or STTR 16
contract identification number for relevant prior 17
SBIR or STTR work done. 18
(2) N
O NEW FUNDS.—No additional funds are 19
authorized to be appropriated for the purpose of car-20
rying out this subsection. 21
SEC. 504. STREAMLINING PROGRAM ADMINISTRATION. 22
Section 9 of the Small Business Act (15 U.S.C. 638), 23
as amended by this Act, is amended— 24
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(1) in subsection (bb)(3), by inserting ‘‘or an-1
other component of the same Federal agency’’ after 2
‘‘another Federal agency’’; 3
(2) in subsection (gg)— 4
(A) in the heading, by striking ‘‘P
ILOT 5
P
ROGRAM’’ and inserting ‘‘COMMERCIALIZA-6
TIONREADINESSPROGRAM’’; 7
(B) by striking ‘‘pilot’’ each place the term 8
appears; 9
(C) by striking paragraph (7); 10
(D) by redesignating paragraph (8) as 11
paragraph (7); and 12
(E) by amending paragraph (7), as so re-13
designated, to read as follows: 14
‘‘(7) D
EFINITION.—In this subsection, the term 15
‘covered Federal agency’— 16
‘‘(A) means a Federal agency participating 17
in the SBIR program or the STTR program; 18
and 19
‘‘(B) does not include the Department of 20
Defense.’’; 21
(3) in subsection (hh)— 22
(A) by striking ‘‘F
UNDING.—’’ and all that 23
follows through ‘‘Federal agencies partici-24
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pating’’ and inserting ‘‘FUNDING.—Federal 1
agencies participating’’; and 2
(B) by striking paragraph (2); 3
(4) in subsection (ii)(2)(B)— 4
(A) in clause (ii), by adding ‘‘and’’ at the 5
end; 6
(B) in clause (iii), by striking ‘‘; and’’ and 7
inserting a period; and 8
(C) by striking clause (iv); 9
(5) in subsection (qq)(3), by striking subpara-10
graph (I); 11
(6) in subsection (vv)(3), by striking subpara-12
graph (C); 13
(7) by redesignating subsection (yy) as sub-14
section (xx); 15
(8) in subsection (xx), as so redesignated— 16
(A) in the subsection heading, by striking 17
‘‘P
ILOT’’; 18
(B) by striking ‘‘STTR P
ROGRAM.—’’ and 19
all that follows through ‘‘Not later than’’ and 20
inserting ‘‘STTR P
ROGRAM.—Not later than’’; 21
(C) by striking paragraph (2); and 22
(D) by striking ‘‘pilot’’; 23
(9) by redesignating subsection (zz) as sub-24
section (yy); and 25
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(10) in subsection (yy), as so redesignated— 1
(A) in the subsection heading, by striking 2
‘‘P
ILOT’’; 3
(B) in paragraph (1)— 4
(i) in the paragraph heading, by strik-5
ing ‘‘P
ILOT’’ and inserting ‘‘PROGRAM’’; 6
(ii) in subparagraph (B), by striking 7
‘‘3.25’’ and inserting ‘‘3.50’’; and 8
(iii) in subparagraph (C), by striking 9
‘‘0.46’’ and inserting ‘‘0.21’’; 10
(C) by striking paragraph (3); and 11
(D) by striking ‘‘pilot’’ each place the term 12
appears. 13
SEC. 505. EXTENDING SBIR AND STTR AUTHORIZATION. 14
Section 9 of the Small Business Act (15 U.S.C. 638), 15
as amended by this Act, is amended— 16
(1) in subsection (m), by striking ‘‘2025’’ and 17
inserting ‘‘2028’’; and 18
(2) in subsection (n)(1)(A), by striking ‘‘2025’’ 19
and inserting ‘‘2028’’. 20
Æ 
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