The Government Accountability Office has found that only three out of 11 federal agencies that take part in the Small Business Innovation Research program awarded grants and contracts to small firms owned by venture capital companies, hedge funds and private equity firms in the past four fiscal years.
Those three agencies are the Department of Education's Institute for Education Sciences, Department of Energy's Advanced Research Projects Agency-Energy and the Department of Health and Human Services' National Institutes of Health, GAO said Friday.
The agencies awarded 62 contracts and grants worth $43.6M combined between FY 2015 and FY 2018, a figure that reflects 0.1 percent to 2.7 percent of the three agencies’ awards.
The congressional watchdog found that NIH is the sole agency that awarded contracts to small businesses owned by multiple investment firms during the period.
The Department of Defense did not award SBIR contracts to small businesses majority-owned by investment firms and funds but sent a “written determination” to some congressional panels and the Small Business Administration for such awards.
GAO said the remaining seven agencies chose not to use the SBIR authority.
“Officials from most of the agencies that elected not to use the authority told GAO they believe that opening their programs to small businesses with majority ownership by multiple investment companies and funds would not substantially contribute to the agencies' mission,” according to the report.