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House Votes to Extend, Expand SBIR Program

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – The US House of Representatives last night voted to reauthorize and expand a program to fund small business research projects for six more years, and the Senate is expected to consider the plan today.

Under the new plan, the Small Business Innovation Research/Small Business Technology Transfer programs will be extended through 2017, the size of the awards will increase, and the allocations for the SBIR program at the National Institutes of Health, the National Science Foundation, and the Department of Energy will increase from 2.5 percent to 3.2 percent over that six-year period. The STTR allocations at those departments would increase from .3 percent to .45 percent over the period.

The renewed SBIR/STTR programs also will streamline and shorten the approval and funding processes and will increase the opportunity for companies funded with venture capital investments to receive these grants.

This House passage of SBIR/STTR, which came as part of a massive defense spending bill amid larger end-of-year budget battles, could signal the endgame of an arduous process to reauthorize these programs, as key committee leaders in the House and Senate agreed to the terms of the renewal earlier this week. Both of these programs, which launched in 1982, have been kept alive during the Obama Administration through a number of temporary extensions, including 14 extensions for SBIR since 2008.

"Because of this deal, businesses will have peace of mind for the next six years," Senator Mary Landrieu (D - La.), who chairs the Senate Committee on Small Business and Entrepreneurship, said in a statement this week. "The nation's innovators will have more access to federal research dollars, and the process by which they get the funding will be more efficient because we cut down the time for final decisions and disbursements."

The new SBIR/STTR programs will increase the level of Phase I awards from $100,000 to $150,000 and Phase II awards from $750,000 to $1 million

The plan also would increase the participation of companies receiving a majority of funding from venture capital investors to apply for expanded portions of agency budgets, at a level of 25 percent at NIH, DOE, and NSF, and 15 percent for other agencies.

The new program also will shorten the time for agencies to make funding decisions to 90 days and will shorten the time between the award decision and the release of funds. It also will increase oversight of the program, reduce the paperwork burden, and establish outreach and commercialization initiatives.

The Biotechnology Industry Organization this week lauded Congress for reaching an agreement on renewing and expanding the programs.

"The importance of supporting continued advancements in science has never been more important as companies are struggling to recover from the economic crisis, and accelerate research, growth, and hiring," BIO President and CEO Jim Greenwood said in a statement. "At the very earliest stages of development, alternate sources of financing, such as SBIR grants, have been instrumental in furthering research and development in biotechnology."

The Federation of American Societies for Experimental Biology, although it supports renewal and expansion of these programs, is not keen on increasing the portion of agency budgets for SBIR/STTR if it will be offset by other cuts to research grant funding.

"We are especially concerned that the proposed increase in the SBIR/STTR allocation would be implemented as the budgets of the federal science agencies are likely to shrink or at best remain flat," FASEB stated in a letter signed by a number of other research advocacy groups last week.

"Furthermore, a mandatory increase in the SBIR/STTR allocations takes flexibility away from the agencies at a time when agency directors are being asked to use fewer resources more efficiently and make increasingly difficult choices. We do not believe it is the best interest of scientific advancement to redirect funds to one research program at the expense of other equally important national research priorities in the current environment."