SMALL BUSINESS INNOVATION RESEARCH PROGRAM IN THE DEPARTMENT OF DEFENSE.

SEC. 4237. SMALL BUSINESS INNOVATION RESEARCH PROGRAM IN THE DEPARTMENT OF DEFENSE. (a) Extension of Program.— Section 5 of the Small Business Innovation Development Act of 1982 (Public Law 97–219; 15 U.S.C. 638 note) is amended— (1) by striking out “Effective October 1, 1993, paragraphs” and inserting in lieu thereof “Paragraphs”; and 106 STAT. 2692 (2) by striking out “are repealed” and inserting in lieu thereof “snail cease to be effective with respect to departments and agencies of the Federal Government other than the Department of Defense on October 1, 1993, and are repealed effective October 1, 2000”. (b) Limitation on Program Awards.— Amounts paid to a small business concern by the Department of Defense under the Small Business Innovation Research Program for a project— (1) in phase I under the program may not exceed $100,000; and (2) in phase II under the program may not exceed $750,000. (c) Commercial Applications Strategy.—Not later than 270 days after the date of the enactment of this Act, the Secretary of Defense, in consultation with the Administrator of the Small Business Administration, shall develop and issue a strategy for effectuating the transition of successful projects under the Small Business Innovation Research Program from phase II under the program into phase III under the program. (d) Repeal of Exclusion of Certain Activities.— (1) Subsection (e)(1) of section 9 of the Small Business Act (15 U.S.C. 638) is amended by striking out “except that for the Department of Defense” and all that follows through “development, and”. (2) (A) Subsection (e)(1) of section 9 of the Small Business Act (15 U.S.C. 638) is amended by striking out the semicolon at the end and inserting in lieu thereof “, and except that for the Department of Energy it shall not include amounts obligated for atomic energy defense programs for weapons and weapons-related activities or for naval reactor programs;”. (B) Subsection (f) of such section is amended by striking out paragraph (2). (e) Percentage Of Required Expenditures For SBIR Contracts.— (1) The Small Business Innovation Research Program shall apply to the Department of Defense (including the military departments) as if the percentage specified in section 9(f)(1) of the Small Business Act (15 U.S.C. 638(f)(1)) with respect to fiscal years after fiscal year 1982 were determined in accordance with the table set forth in paragraph (2) (rather than 1.25 percent). (2) (A) The percentage under section 9(f)(1) of the Small Business Act (15 U.S.C. 638(0(1)) for any fiscal year for the Department of Defense and each military department shall be determined in accordance with the following table: For fiscal year: The percentage is: 1993 1.25 1994 1.5 1995 1.75 1996 2.0 1997 2.25 1998 and thereafter 2.5. (B) If the determination of the Secretary of Defense under subparagraph (C) is a negative determination (as set forth in that paragraph), then the percentage under section 9(f)(1) of the Small Business Act (15 U.S.C. 638(f)(1)) for the Department of Defense and each military department for fiscal years after fiscal year 1996 shall remain at the level applicable for fiscal year 1996 (notwithstanding the percentages specified in subparagraph (A) for fiscal years after fiscal year 1996). (C) Not later than June 30, 1996, the Secretary of Defense during fiscal year 1996 shall determine whether there has been 106 STAT. 2693a demonstrable reduction in the quality of research performed under funding agreements awarded by the Department of Defense under the SBIR program since the beginning of fiscal year 1993 such that increasing the percentage under subparagraph (A) for fiscal years after fiscal year 1996 with respect to the department would adversely affect the performance of the department’s research programs. If the determination of the Secretary is that there has been such a demonstrable reduction in the quality of research such that increasing the percentage under subparagraph (B) for fiscal years after fiscal year 1996 with respect to the department would adversely affect the performance of the department’s research programs, the Secretary shall be considered for purposes of subparagraph (B) to have made a negative determination. The determination of the Secretary concerned under this paragraph shall be made after considering the assessment of the Comptroller General with respect to that department in the report transmitted under subparagraph (D). (D) Not later than March 30, 1996, the Comptroller General shall transmit to the Congress and the Secretary of Defense a report setting forth the Comptroller General’s assessment, with respect to the Department of Defense of whether there has been a demonstrable reduction in the quality of research performed under funding agreements awarded by the department under the SBIR program since the beginning of fiscal year 1993 such that increasing the percentage under subparagraph (A) for fiscal years after fiscal year 1996 with respect to the department would adversely affect the performance of the department’s research programs. (E) The results of each determination under subparagraph (C) shall be transmitted to the Congress not later than June 30, 1996. (f) Definitions.— In this section: (1) The term “Small Business Innovation Research Program” means the program established under the following provisions of section 9 of the Small Business Act (15 U.S.C. 638): (A) Paragraphs (4) through (7) of subsection (b). (B) Subsections (e) through (k). (2) The term “phase I”, with respect to the Small Business Innovation Research Program, means the first phase described in subsection (e)(4)(A) of section 9 of the Small Business Act. (3) The term “phase II”, with respect to the Small Business Innovation Research Program, means the second phase described in subsection (e)(4)(B) of such section. (4) The term “phase III”, with respect to the Small Business Innovation Research Program, means the third phase described in subsection (e)(4)(C) of such section. (g) Effective Date.—Subject to subsection (h), this section, and the amendments made by this section, shall take effect on October 1, 1992, and shall apply with respect to fiscal years after fiscal year 1992. (h) Effectiveness of Section Conditional on Failure to Enact Other Legislation.— (1) In the event of the enactment of H.R. 4400 or S. 2941, 102d Congress, on or before the date of the enactment of this Act, then this section and the amendments made by this section shall not take effect. (2) (A) In the event of the enactment of H.R. 4400 or S. 2941, 102d Congress, after the date of the enactment of this Act, then, 106 STAT. 2694 effective immediately before the enactment of H.R. 4400 or S. 2941,102d Congress— (i) this section shall cease to be effective; and (ii) the provisions of a small business law that are amended by this section shall be effective and read as such provisions of that law were in effect immediately before the enactment of this Act, except that to the extent that any amendment is made to such a provision of a small business law by any other provision of law referred to in subparagraph (B), such provision of a small business law shall be effective and shall read as amended by that other provision of law. (B) For the purposes of subparagraph (A)(ii), a provision of law referred to in this subparagraph is the following: (i) A provision or this Act other than a provision of this section. (ii) A provision of any other Act if the provision takes effect during the period beginning on the date of the enactment of this Act and ending immediately before the enactment of H.R. 4400 or S. 2941, 102d Congress. (C) In this paragraph, the term “small business law” means— (i) the Small Business Act (15 U.S.C. 631 et seq.); and (ii) the Small Business Innovation Development Act of 1982 (15 U.S.C. 638 note).