Committee Calls for Sweeping Reforms to SBIR Program – Post No. 013008-2


News From the
Committee on Small Business
Nydia M. Velázquez, Chairwoman

Panel Underscores Initiative’s Contributions to Lagging Economy

WASHINGTON, D.C. – As the specter of a recession looms, small business innovation becomes an increasingly vital asset to our economy. It was technology startups, after all, that led the way back to growth during our last slowdown. During a hearing on the Small Business Innovation and Research (SBIR) program today, witnesses underscored its importance in ensuring American competitiveness.  They also offered compelling evidence of a need to reform various parts of the initiative. 

“SBIR is the largest government-wide research and development program, and it has helped turn some of the nation’s best ideas into tangible market realities,” said Chairwoman Nydia Velázquez.  “Unfortunately, many entrepreneurs are still not getting the access to the R&D funds they need.  That puts them at great disadvantage and robs our economy of the type of innovation we require most.”

The SBIR was created by Congress in 1982 and is scheduled to sunset on September 30, 2008.  Throughout its history, the program has used small firms to help federal agencies meet their R&D goals.  It has also fostered considerable technological innovation and prompted the commercialization of resulting products and services. However, as technology and national priorities change, the initiative is failing to keep pace.

 “Even in a challenging economy, SBIR has helped small firms create jobs and wealth.  We must continue to strengthen this program and align its focus with today’s technological realities,” said Chairwoman Velázquez.

When the SBIR Reauthorization Act of 2000 was passed, technologies such as wireless communications, high definition television and hybrid cars were still in relative infancy.  While that law made several modifications, the program is in need of further modernization.  Witnesses also pointed to a need for increasing SBIR grants, suggested streamlining the application process, and called for greater flexibility to allow participating firms to leverage private sector funds.

“One sure way to keep the American economy on the right track is to reform this initiative with an emphasis on providing resources for economically viable technologies,” said Chairwoman Velázquez.  “We should increase competition within SBIR, ensure that awards go to projects that will produce the greatest return for taxpayers, and do everything possible to help today’s small firms bring forth tomorrow’s goods and services.”


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