05-9973. Small Business Innovation Research Program Policy Directive

AGENCY:

U.S. Small Business Administration.

ACTION:

Notice of proposed amendments to Policy Directive.

SUMMARY:

This document proposes amendments to the Small Business Innovation Research (SBIR) Program Policy Directive. These proposed amendments reflect the requirements that the Executive Order, Encouraging Innovation in Manufacturing, imposes on the Small Business Administration (SBA) and the Federal agencies that participate in the SBIR program. This document also provides guidelines and directives to Federal agencies for the general conduct of the program as it relates to implementing the Executive Order.

DATES:

Public comments on the proposed amendments to the SBIR Policy Directive must be received on or before June 20, 2005.

ADDRESSES:

You may submit comments, identified by RIN 3245-AF21, by any of the following methods. (1) The Federal eRulemaking portal: www.regulations.gov; (2) e-mail at [e-mail] (include RIN in the subject line of the message); (3) mail, addressed to Edsel M. Brown, Jr., Assistant Administrator for Technology, Office of Technology, Office of Policy, Planning, and Liaison; Office of Government Contracting and Business Development, U.S. Small Business Administration, 409 3rd Street, SW., Washington, DC 20416.

FOR FURTHER INFORMATION CONTACT:

Edsel M. Brown, Jr., Office of Technology, Office of Policy, Planning, and Liaison, Office of Government Contracting and Business Development, at [phone] or at [e-mail].

SUPPLEMENTARY INFORMATION:

In 1982, Congress enacted the Small Business Innovation Development Act of 1982 (SBIDA), Public Law 97-219 (codified at 15 U.S.C. 638), which established the SBIR Program. The statutory purpose of the Small Business Innovation Research (SBIR) Program is to strengthen the role of innovative small business concerns (SBCs) in Federally-funded research and research and development (R/R&D).

The SBIR Program is a phased process, uniform throughout the Federal Government, of soliciting proposals and awarding funding agreements for R/R&D to meet stated agency needs or missions. To stimulate and foster scientific and technological innovation, including increasing commercialization of Federal R/R&D, the program must follow a uniform competitive process of three phases: Phase I, Phase II, and Phase III.

SBIDA requires the SBA to “issue Policy Directives for the general conduct of the SBIR programs within the Federal Government.” 15 U.S.C. 638(j)(1). SBA proposes to amend the most recent SBIR Policy Directive which was published on September 24, 2002, at 67 FR 60072-60098.

On February 24, 2004, the President signed Executive Order 13329, “Encouraging Innovation in Manufacturing.” The purpose of the Executive Order is to ensure that Federal Government agencies and departments properly and effectively assist the private sector in its manufacturing innovation efforts through the use of the SBIR and the Small Business Transfer Technology (STTR) Programs. Pursuant to the Executive Order, the SBA is required to:

(1) Establish, after consultation with the Director of the Office of Science and Technology Policy (OSTP), formats and schedules for submission of reports by the heads of departments and agencies; and (2) issue to departments and agencies guidelines and directives (in addition to the formats and schedules) as the SBA Administrator determines from time to time are necessary to implement the Executive Order, after such guidelines and directives are submitted to the President, through the Director of OSTP, and are approved by the President.

In addition, the Executive Order requires the heads of the agencies and departments with one or more SBIR or STTR programs to perform the following: (1) To the extent permitted by law and in a manner consistent with the mission of that department or agency, give high priority within such programs to manufacturing-related research and development to advance innovation in manufacturing through small business; and (2) to submit reports annually to the Administrator of the SBA and the Director of the OSTP concerning the efforts of such departments or agencies in implementing the Executive Order. SBA proposes to amend the SBIR Policy Directive in order to fulfill its responsibilities under Executive Order 13329 and to provide the guidelines and requirements that the participating agencies and departments need to implement the provisions of the Executive Order as set forth above.

Section-by-Section Analysis

Section 2 of the SBIR Policy Directive contains a summary of the legislative provisions applicable to the SBIR Program. SBA is proposing to amend this section to include an overview of the requirements imposed by Executive Order 13329 and to amend the section heading to more accurately reflect the scope of the section.

Section 3 of the SBIR Policy Directive sets forth definitions pertinent to the SBIR program. SBA proposes to add a definition for “Manufacturing-related” research and development. The definition was initially developed by the OSTP, the National Institute of Standards and Technology, and the National Science Foundation and was reviewed by the National Science and Technology Council. The definition encompasses research and development that improves existing methods or processes, including machine technologies, systems technologies, and environmental or societal technologies. In addition, to facilitate the proper placement of this new definition, it will be necessary to redesignate several paragraphs in section 3.

Section 4 of the Policy Directive includes a description of the structure and purpose of Phases I, II, and III of the SBIR Program and the standards for evaluating grant proposals. In section 4(a)(2) of the Policy Directive, SBA is proposing to add that agencies may, to the extent permitted by law, give additional consideration to manufacturing-related proposals.

Section 9 of the Policy Directive sets forth the responsibilities of the participating agencies and departments under the SBIR Program. In the amendments to the Policy Directive, SBA is proposing to add those responsibilities imposed by Executive Order 13329. Specifically, as amended, the SBIR Policy Directive will require agencies and departments to develop an Action Plan for the implementation of Executive Order 13329, identifying procedures used for giving priority to manufacturing-related R&D and provide information regarding Executive Order 13329 on their SBIR Web site. In addition, the SBA proposes deleting a dated reference to the National Critical Technologies panel.

Section 10 of the Policy Directive discusses the content, structure, and submission requirements for the report that each participating agency and department must submit to the SBA by March 15 of each year. SBA proposes to amend section 10(a) to make electronic reporting of agencies' annual report mandatory and amend section 10(b) to add the requirement for each agency and department to also report on its activities related to the implementation of Executive Order 13329. In addition, the SBA proposes deleting a dated reference to the National Critical Technology topic number.

Section 11 of the Policy Directive sets forth SBA's responsibilities with respect to the SBIR program. SBA proposes to amend this section to delete a dated reference to the National Critical Technology panel.

Finally, in order to clarify the reporting requirements, SBA proposes to reformat Appendix II, changing the description in some fields, and adding fields that were not previously listed. SBA proposes consolidating the file format to a single file and numbering all fifty-eight (58) fields required for reporting. SBA has identified those fields which are mandatory for all records, mandatory for STTR projects, and mandatory for Phase II projects. SBA also proposes renaming the field formerly named “Minority” as “Socially and Economically Disadvantaged Small Business.” As described in the most recent publication of the SBIR policy directive, the STTR reauthorization legislation, Public Law 107-50, requires collection of information on awardees' HUBZone certification. However, the requirement was omitted from the Appendix as a reporting field. To rectify this, SBA proposes adding “HUBZone Certified” as field 12.

Paperwork Reduction Act

SBA has determined that the proposed amendments to the SBIR Policy Directive, as a result of Executive Order 13329, do not impose additional reporting or recordkeeping requirements under the Paperwork Reduction Act, 44 U.S.C. Chapter 35.

Notice of Proposed Policy Directive; Small Business Innovation Research Program

To: The Directors, Small Business Innovation Research Program

Subject: Executive Order 13329, “Encouraging Innovation in Manufacturing,” Revisions to the Small Business Innovation Research Program Policy Directive.

1. Purpose. Section 9(j)(3) of the Small Business Act (15 U.S.C. 638(j)(3)) requires the U.S. Small Business Administration (SBA) Administrator to modify the Small Business Innovation Research (SBIR) Program Policy Directive as required for the general conduct of the SBIR Program within the Federal Government.

2. Authority. This proposed Policy Directive is issued under the authority of 15 U.S.C. 638(j).

3. Procurement Regulations. The Federal Acquisition Regulations may need to be modified to conform to the requirements of the Reauthorization and a final Policy Directive. Regulatory provisions that pertain to the areas of SBA responsibility will require approval of the SBA Administrator or designee. The Office of Technology, Office of Policy, Planning, and Liaison, Office Government Contracting/Business Development, SBA, is the appropriate office for coordinating such regulatory provisions.

4. Personnel Concerned. All Federal Government personnel who are involved in the administration of the program, including those involved with the issuance and management of funding agreements of the SBIR Program and the establishment of goals for small business concerns (SBCs) in research or research and development procurements or grants.

5. Distribution. Federal Government agencies and departments participating in the SBIR Program and those required to establish small business research development goals as directed by section 9 of the Small Business Act (15 U.S.C. 638(j)).

6. Originator. Office of Technology, Office of Policy, Planning, and Liaison, Office of Government Contracting and Business Development, SBA.

7. Dates. The SBIR Program is authorized through September 30, 2008. A final Policy Directive will be effective when issued as final in the Federal Register.

Authorized By: Allegra McCullough

Associate Deputy Administrator, Government Contracting/Business Development, U.S. Small Business Administration

For the reasons set forth in the preamble, SBA proposes to amend the SBIR Policy Directive as follows:

1. Revise the heading of § 2 to read as follows:

Relevant Legal Provisions

2. Amend § 2 by adding a new paragraph (g) to read as follows:

(g) Under Executive Order 13329, “Encouraging Innovation in Manufacturing,” Federal agencies have an important role in helping to advance innovation, including innovation in manufacturing, through small businesses. Agencies must give high priority to SBIR projects that are focused on manufacturing related R&D, in a manner consistent with the missions of the agencies and the purpose of the SBIR program. Participating agencies must report annually to the SBA Administrator and the Director of the Office of Science and Technology Policy on its efforts to carry out Executive Order 13329. The Executive Order directs the SBA to establish formats and schedules for this reporting and to issue guidelines and directives as necessary to implement the Executive Order.

3. Amend section 3 by redesignating paragraphs (s) through (gg) as (t) through (hh) and adding new paragraph (s) to read as follows:

(s) Manufacturing-related. Activities that relate to manufacturing processes, equipment and systems, or manufacturing workforce skills and protection including, unit process level technologies; machine level technologies; systems level technologies; and environmental or societal level technologies.

4. Amend section 4(a)(2) by adding the following after the second sentence:

The proposal evaluation process shall also, to the extent permitted by law and in a manner consistent with the mission of the agency and the purpose of the SBIR program, give consideration to manufacturing-related research.

5. Amend section 9(a)(2) by deleting “(i) the National Critical Technologies panel (or its successor) in reports required under 42 U.S.C. 6683, or (ii).”

6. Amend section 9 to add paragraphs (g) and (h) to read as follows:

(g) To the extent permitted by the law, and in a manner consistent with the mission of that agency and the purpose of the SBIR program, each participating agency must give priority in the SBIR program to manufacturing-related research and development, including the following:

(1) Unit process level technologies that create or improve manufacturing processes, including:

(i) Fundamental improvements in existing manufacturing processes that deliver substantial productivity, quality, or environmental benefits; or

(ii) Development of new manufacturing processes, including new materials, coatings, methods, and associated practices.

(2) Machine level technologies that create or improve manufacturing equipment, including:

(i) Improvements in capital equipment that create increased capability (such as accuracy or repeatability), increased capacity (through productivity improvements or cost reduction), or increased environmental efficiency (safety, energy efficiency, environmental impact); or

(ii) New apparatus and equipment for manufacturing, including additive and subtractive manufacturing, deformation and molding, assembly and test, semiconductor fabrication, biologics, biomaterials, vaccines or drug production, and nanotechnology.

(3) Systems level technologies for innovation in the manufacturing enterprise, including:

(i) Advances in controls, sensors, networks, and other information technologies which improve the quality and productivity of manufacturing cells, lines, systems, and facilities;

(ii) Innovation in extended enterprise functions critical to manufacturing, such as quality systems, resource management, supply change integration, and distribution, scheduling and tracking; or

(iii) Technologies that enable integrated and collaborative product and process development, including computer-aided and expert systems for design, tolerancing, process and materials selection, life-cycle cost estimation, rapid prototyping, and tooling.

(4) Environmental or societal level technologies that improve workforce abilities, productivity, and manufacturing competitiveness, including:

(i) Technologies for improved workforce health and safety, such as human factors and ergonomics; or

(ii) Technologies that aid and improve workforce manufacturing skill and technical excellence, such as educational systems incorporating improved manufacturing knowledge and instructional methods.

(h) Agencies must develop an Action Plan for implementing Executive Order 13329, which identifies activities used to give priority in the SBIR program to manufacturing-related research and development. These activities should include adding information on the Executive Order to the agency's SBIR program website.

7. Amend § 10(a) to read as follows:

(a) Annual Report Due Date and Format. Reporting must be on an annual basis and will be for the period ending September 30 of each fiscal year. The report must be submitted to SBA by March 15 of each year. For example, the report for FY 2005 (October 1, 2001-September 30, 2004) must be submitted to SBA by March 15, 2006. SBA encourages agencies to submit their annual report before the March 15 due date. The report must be submitted electronically to [e-mail], and a single hard copy should be sent to the address noted in Section 5(b). The award information contained in the annual report must be validated and complete upon submission to SBA on March 15.

8. Amend § 10(b) by deleting paragraph 12 and redesignating paragraphs 13 and 14 as 12 and 13 and adding paragraph 14 to read as follows:

(14) Report on the specific activities undertaken to implement Executive Order 13329, including, for example, solicitation notices and new topics; additional proposal evaluation criteria or procedures; internet-based activities to promulgate the Executive Order, and any other activities in support of the Executive Order. The Report shall include a description of all significant alternatives considered to implement the Executive Order, detailing the factual, policy, and legal reasons for selecting the alternative(s) adopted and the factual, policy, and legal reasons for rejecting the other significant alternatives considered.

9. Amend § 11(a) by deleting “the National Critical Technologies panel (or its successor) and”.

10. Amend Appendix II to read as follows:

Tech-Net Data Fields For All Agency SBIR/STTR Annual Data Submissions to the SBA

Field name	Required code	Type	Width	Description
1. Program Identification	MA	Numeric	1	SBIR/STTR Award Program Identifier (0=STTR; 1=SBIR).
2. Company	MA	Char	80	Company Name.
3. Company Division		Char	80	Company Division.
4. Street1	MA	Char	80	Street Address 1.
5. Street2		Char	80	Street Address 2.
6. City	MA	Char	40	City.
7. State	MA	Char	2	State.
8. Zip	MA	Numeric	5	Zip.
9. Zip4	MA	Numeric	4	Zip + 4.
10. Socially and Economically Disadvantaged Small Business	MA	Numeric	1	Socially and Economically Disadvantaged Small Business indicator (Allowable values: 0 = yes; 1 = no).
11. Women	MA	Numeric	1	Women-owned company indicator (Allowable values: 0 = yes; 1 = no).
12. HUBZone Certified	MA	Numeric	1	HUBZone Certified Small Business Concern (Allowable values: 0 = yes; 1 = no).
13. Contact First	MA	Char	40	Company Official contact first name.
14. Contact Last	MA	Char	40	Contact last name.
15. Contact Middle Initial		Char	1	Contact middle initial (One character only—no periods or full names).
16. Contact Title		Char	40	Contact Official title.
17. Contact Phone	MA	Char	10	Contact Official phone (Ten characters only, for example 9999999999).
18. Contact Email Address	MA	Char	50	Contact email address.
19. Employees	MA	Numeric	5	Number of employees.
20. Agency	MA	Numeric	2	Awarding agency (see below).
21. Branch	MA	Number	1	Awarding DOD branch name (see below).
22. Phase 1 Award Year	MA	Numeric	4	Phase 1 Year.
23. Phase 1 Projected Total Amount	MA	Numeric	10	Phase 1 Projected Total Amount.
24. Phase 2 Award Year	M2	Numeric	4	Phase 2 Year (Phase 2 records only).
25. Phase 2 Projected Total Amount	M2	Numeric	10	Phase 2 Projected Total Amount (Phase 2 records only).
26. PI First	MA	Char	40	Principal Investigator First Name.
27. PI Last	MA	Char	40	Principal Investigator Last Name.
28. PI Middle Initial		Char	1	Principal Investigator middle initial (one character only—no periods or full names).
29. PI Title		Char	40	Principal Investigator Title.
30. PI Phone		Char	10	Principal Investigator phone (Ten characters only; for example 9999999999).
31. PI Email Address		Char	50	Principal Investigator email address.
32. Topic Code	MA	Char	15	Agency Solicitation Topic Number.
33. RI TYPE	MT	Numeric	1	Type of research institution (see below).
34. RI Name	MT	Char	80	Research institution (STTR only).
35. RI Street 1	MT	Char	80	Research institution address (STTR only).
36. RI Street 2		Char	80	Research institution address (STTR only).
37. RI City	MT	Char	40	Research institution city (STTR only).
38. RI State	MT	Char	2	Research institution State (STTR only).
39. RI Zip	MT	Numeric	5	Research institution Zip (STTR only).
40. RI Zip4		Numeric	4	Research institution Zip + 4.
41. RI Official First		Char	40	Research institution Official First Name.
42. RI Official Last		Char	40	Research institution Official Last Name.
43. RI Official Initial		Char	1	Research institution Official Middle Initial (One character only no periods or full names).
44. RI Official Phone		Char	10	Research institution Official's phone # (Ten characters only; for example, 9999999999).
45. Tracking Number	MA	Char	20	Agency key identifier (Internal number scheme).
46. TIN/EIN	MA	Char	10	Taxpayer/Employer Identification number Prefix with 1 for EIN; 2 for Social Security Number. This field must be exactly 10 digits in size and must be a valid EIN or TIN.
47. Contract/Grant Num	MA	Char	20	Agency Award.
48. Solicitation Number	MA	Char	20	Solicitation Number.
49. Solicitation Year	MA	Numeric	4	Year of the Solicitation.
50. Title	MA	Char	800	Title of research project.
51. Abstract	MA	Char	1500	Technical Abstract.
52. Results		Char	1000	Project anticipated results.
53. Comments		Char	1000	Project comments.
54. Project Initiator	MT	Char	1	Initiator of STTR collaborative effort (Allowable values: S = Small Business Concern; R = Research Institution) (STTR only).
55. Technology Used	MT	Char	1	SBC or RI originate any technology used in the STTR project (Allowable values: S = Small Business Concern; R = Research Institution) (STTR only).
56. Time to establish license agreement (months)	MT	Numeric	2	Time duration to establish any STTR license agreement (STTR only).
57. STTR Proceeds Distribution to SBC (%)	MT	Numeric	2	Allocation of proceeds from sale of STTR technology (STTR only).
58. STTR Proceeds Distribution to RI (%)	MT	Numeric	2	Allocation of proceeds from sale of STTR technology (STTR only).

Note:

Required codes: Required fields are noted by:

MA Mandatory for ALL project

M2 Mandatory for Phase 2 projects

MT Mandatory for STTR projects

Optional field

Each agency must submit a file that contains all 58 fields for each record. Each agency must ensure that data submitted to the SBA includes all of the data fields above, even if the field is empty. For example, since DOD is the only agency using field #21 (Branch), other agencies must include a blank field 21 in their data submissions.

(Field 1) Program Identification Code

0 STTR

1 SBIR

(Field 20) Agency Code

1 DOD

2 DOE

3 NASA

4 HHS

5 NSF

6 DOT

7 EPA

8 (No longer used)

9 ED

10 USDA

11 DOC

12 (No longer used)

13 (No longer used)

14 DHS

15 HUD

(Field 21) Branch Code

1 AF

2 ARMY

3 MDA

4 DARP

5 DTRA

6 NAVY

7 OSD

8 SOCO

9 NGA

10 CBD

If any new codes should be added, please notify SBA's Office of Technology.

(Field 33) Research Institution Type

Code	Research institution types
1	Nonprofit college or university.
2	Domestic nonprofit research organization.
3	Federally Funded R&D Center (FFRDC).

The SBA will accept data in only the following formats:

• Tab delimited text files
• Microsoft Excel files
• Microsoft Access files

If you have any questions regarding Tech-Net Data submissions, please contact SBA's Office of Technology at [phone] or [e-mail].

Michael McHale,

Acting Associate Deputy Administrator, Government Contracting/Business Development, U.S. Small Business Administration.