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Lawmakers Eye Major Changes to Tech-Focused Small Business Programs; Heidi Shyu Quoted

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The Small Business Innovation Research and Technology Transfer programs are set to expire by the end of September and lawmakers are considering major reforms to the programs to address concerns of alleged abuse of the so-called SBIR “mills,” Breaking Defense reported Monday.

The Senate Small Business Committee is pursuing two proposals and one of these two would limit eligibility to the SBIR and STTR programs based on the number of awards secured over a term of five years.

A House Small Business Committee proposal would restrict eligibility to the programs based on improved requirements related to current Phase I to Phase II transition rate and commercialization benchmarks under the third phase.

Heidi Shyu, undersecretary for research and engineering at the Department of Defense, said the proposed benchmarks introduce “significant concerns” for DOD and that an extension of the program would be the needed approach to evaluate potential challenges to the initiative.

“The Department, as well as the SBA and other agencies, respectfully disagree with the argument that multiple awards represent a significant problem and that having multiple awards ‘crowds out’ or limits competition,” said Shyu, a 2022 Wash100 Award winner.

“All SBIR/STTR awards are competitively awarded efforts with multiple awards addressing multiple topics. While a company can receive multiple awards, those awards are not for the same topic. In addition, the Department is concerned about the impact to the Department’s small business innovation base and its ability to meet warfighter needs if current SBIR/STTR projects are terminated due to benchmarks that go too far,” she added.