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Print Edition StoriesFriday, August 7, 2009
Policy Tracker
Congress extends SBIR awards without addressing VC issue
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Congress extended the Small Business Innovation Research program through Sept. 30 after failing to resolve differences over what types of businesses should be eligible for these contracts.
Through the SBIR program, 11 federal agencies set aside at least 2.5 percent of their outside research budgets for small businesses, which represents more than $2 billion a year. The program’s authorization was scheduled to expire July 31.
Both the House and Senate passed bills that reauthorized the program, but the bills differed in several key areas. Leaders of each chamber’s small-business committees were unable to resolve the differences before the July 31 deadline.
“This temporary extension ensures that this important program will continue creating cutting-edge technologies and high-paying jobs,” said Sen. Mary Landrieu, D-La., chair of the Senate Small Business and Entrepreneurship Committee.
Landrieu said she has been working with her counterparts in the House “to reach a fair compromise” to strengthen the program and guarantee that it remains “for truly small businesses.”
The biggest difference between the House and Senate bills had to do with whether small companies that are majority-owned by venture capital firms should be eligible for SBIR awards. In 2003, an administrative law judge ruled these companies do not qualify as small businesses. The Biotechnology Industry Organization and the National Venture Capital Association have been pushing to overturn that decision ever since.
The House bill would make VC-owned small companies eligible for SBIR awards, subject to conditions, while the Senate bill would make firms majority-owned by VC firms eligible for only a limited share of SBIR awards. The House bill also calls for sizable increases in the size of SBIR awards without increasing the share of federal research dollars that would go to the program. This would result in bigger, but fewer, SBIR awards. Opponents of the House bill, such as the National Small Business Association, said this would mean fewer small businesses would be able to participate in the program.
— Kent Hoover, ACBJ Wire Services
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