ESTABLISHMENT OF SMALL BUSINESS TECHNOLOGY TRANSFER PILOT PROGRAM.

SEC. 202. ESTABLISHMENT OF SMALL BUSINESS TECHNOLOGY TRANSFER PILOT PROGRAM. (a) Additional SBA Duties.— Section 9(b) of the Small Business Act (15 U.S.C. 638(b)) is amended— (1) in paragraph (4), by inserting “and small business technology transfer pilot programs” after “small business innovation research programs”; and (2) in paragraphs (5), (6), and (7), by inserting “and STTR” after “SBIR” each place such term appears. 106 STAT. 4257 (b) Small Business Technology Transfer Pilot Program Defined.— Section 9(e) of the Small Business Act (15 U.S.C. 638(e)) is amended— (1) in paragraph (4), by striking “and” at the end; (2) in paragraph (5), by striking the period at the end and inserting a semicolon; and (3) by adding at the end the following new paragraphs: “(6) the term ‘Small Business Technology Transfer Program’ or ‘STTR’ means a pilot program under which a portion of a Federal agency’s extramural research or research and development effort is reserved for award to small business concerns for cooperative research and development through a uniform process having— “(A) a first phase, to determine, to the extent possible, the scientific, technical, and commercial merit and feasibility of ideas submitted pursuant to STTR program solicitations; “(B) a second phase, to further develop proposed ideas to meet particular program needs, in which awards shall be made based on the scientific, technical, and commercial merit and feasibility of the idea, as evidenced by the first phase and by other relevant information; and “(C) where appropriate, a third phase— “(i) in which commercial applications of STTR funded research or research and development are funded by non-Federal sources of capital or, for products or services intended for use by the Federal Government, by follow-on non-STTR Federal funding awards; and “(ii) for which awards from non-STTR Federal funding sources are used for the continuation of research or research and development that has been competitively selected using peer review or scientific review criteria; “(7) the term ‘cooperative research and development’ means research or research and development conducted jointly by a small business concern and a research institution in which not less than 40 percent of the work is performed by the small business concern, and not less than 30 percent of the work is performed by the research institution; and “(8) the term ‘research institution’ means a nonprofit institution, as defined in section 4(5) of the Stevenson-Wydler Technology Innovation Act of 1980, and includes federally funded research and development centers, as identified by the National Scientific Foundation in accordance with the governmentwide Federal Acquisition Regulation issued in accordance with section 35(c)(1) of the Office of Federal Procurement Policy Act (or any successor regulation thereto).”. (c) Establishment of Small Business Technology Transfer Programs by Certain Federal Agencies.— Section 9 of the Small Business Act (15 U.S.C. 638) is amended by adding at the end the following new subsections: “(n) Required Expenditures for STTR by Federal Agencies.— “(1) Required expenditure amounts.— Each Federal agency which has an extramural budget for research or research and development in excess of $1,000,000,000 in fiscal year106 STAT. 4258 1994, 1995, or 1996, is authorized to expend with small business concerns— “(A) not less than 0.05 percent of such budget in fiscal year 1994; “(B) not less than 0.1 percent of such budget in fiscal year 1995; and “(C) not less than 0.15 percent of such budget in fiscal year 1996, specifically in connection with STTR programs which meet the requirements of this section, policy directives, and regulations issued under this section. “(2) Limitations.— A Federal agency shall not— “(A) use any of its STTR budget established pursuant to paragraph (1) for the purpose of funding administrative costs of the program, including costs associated with salaries and expenses, or, in the case of a small business concern or a research institution, costs associated with salaries, expenses, and administrative overhead (other than those direct or indirect costs allowable under guidelines of the Office of Management and Budget and the governmentwide Federal Acquisition Regulation issued in accordance with section 25(c)(1) of the Office of Federal Procurement Policy Act); or “(B) make available for the purpose of meeting the requirements of paragraph (1) an amount of its extramural budget for basic research which exceeds the percentage specified in paragraph (1). “(3) Exclusion of certain funding agreements.— Funding agreements with small business concerns for research or research and development which result from competitive or single source selections other than an STTR program shall not be considered to meet any portion of the percentage requirements of paragraph (1). “(o) Federal Agency STTR Authority.— Each Federal agency required to establish an STTR program in accordance with subsection (n) and regulations issued under this Act, shall— “(1) unilaterally determine categories of projects to be included in its STTR program; “(2) issue STTR solicitations in accordance with a schedule determined cooperatively with the Administration; “(3) unilaterally determine research topics within the agency’s STTR solicitations, giving special consideration to broad research topics and to topics that further 1 or more critical technologies, as identified— “(A) by the National Critical Technologies Panel (or its successor) in reports required under section 603 of the National Science and Technology Policy, Organization, and Priorities Act of 1976; or “(B) by the Secretary of Defense, in accordance with section 2522 of title 10, United States Code; “(4) unilaterally receive and evaluate proposals resulting from STTR solicitations; “(5) unilaterally select awardees for its STTR funding agreements and inform each awardee under such an agreement, to the extent possible, of the expenses of the awardee that will be allowable under the funding agreement; 106 STAT. 4259 “(6) administer its own STTR funding agreements (or delegate such administration to another agency); “(7) make payments to recipients of STTR funding agreements on the basis of progress toward or completion of the funding agreement requirements and, in all cases, make payment to recipients under such agreements in full, subject to audit, on or before the last day of the 12-month period beginning on the date of the completion of such requirements; “(8) submit an annual report on the STTR program to the Administration and the Office of Science and Technology Policy; “(9) develop a model agreement not later than July 31, 1993, to be approved by the Administration, for allocating between small business concerns and research institutions intellectual property rights and rights, if any, to carry out follow-on research, development, or commercialization; “(10) develop, in consultation with the Office of Federal Procurement Policy and the Office of Government Ethics, procedures to ensure that federally funded research and development centers (as defined in subsection (e)(8)) that participate in STTR agreements— “(A) are free from organizational conflicts of interests relative to the STTR program; “(B) do not use privileged information gained through work performed for an STTR agency or private access to STTR agency personnel in the development of an STTR proposal; and “(C) use outside peer review, as appropriate; and “(11) not later than July 31, 1993, develop procedures for assessing the commercial merit and feasibility of STTR proposals, as evidenced by— “(A) the small business concern’s record of successfully commercializing STTR or other research; “(B) the existence of second phase funding commitments from private sector or non-STTR funding sources; “(C) the existence of third phase follow-on commitments for the subject of the research; and “(D) the presence of other indicators of the commercial potential of the idea. “(p) STTR Policy Directive.— “(1) Issuance.— The Administrator shall issue a policy directive for the general conduct of the STTR programs within the Federal Government. Such policy directive shall be issued after consultation with— “(A) the heads of each of the Federal agencies required by subsection (n) to establish an STTR program; “(B) the Commissioner of Patents and Trademarks; and “(C) the Director of the Office of Federal Procurement Policy. “(2) Contents.— The policy directive required by paragraph (1) shall provide for— “(A) simplified, standardized, and timely STTR solicitations; “(B) a simplified, standardized funding process that provides for— “(i) the timely receipt and review of proposals; 106 STAT. 4260 “(ii) outside peer review, if appropriate; “(iii) protection of proprietary information provided in proposals; “(iv) selection of awardees; “(v) retention by a small business concern of the rights to data generated by the concern in the performance of an STTR award for a period of not less than 4 years; “(vi) continued use by a small business concern, as a directed bailment, of any property transferred by a Federal agency to the small business concern in the second phase of the STTR program for a period of not less than 2 years, beginning on the initial date of the concern’s participation in the third phase of such program; “(vii) cost sharing; “(viii) cost principles and payment schedules; and “(ix) 1-year awards for the first phase of an STTR program, generally not to exceed $100,000, and 2-year awards for the second phase of an STTR program, generally not to exceed $500,000, greater or lesser amounts to be awarded at the discretion of the awarding agency; “(C) minimizing regulatory burdens associated with participation in STTR programs; “(D) guidelines for a model agreement, to be used by all agencies, for allocating between small business concerns and research institutions intellectual property rights and rights, if any, to carry out follow-on research, development, or commercialization; “(E) procedures to ensure that— “(i) a recipient of an STTR award is a small business concern, as defined in section 3 and the regulations promulgated thereunder; and “(ii) such small business concern exercises management and control of the performance of the STTR funding agreement pursuant to a business plan providing for the commercialization of the technology that is the subject matter of the award; and “(F) procedures to ensure, to the extent practicable, that an agency which intends to pursue research, development, or production of a technology developed by a small business concern under an STTR program enters into follow-on, non-STTR funding agreements with the small business concern for such research, development, or production.”. (d) Timing of Issuance of Policy Directive.— The policy directive required by section 9(p) of the Small Business Act (as added by subsection (c) of this section) shall be published— (1) in proposed form (with an opportunity for public comment of not less than 30 days), not later than April 30, 1993; and (2) in final form, not later than July 31, 1993. (e) Report of the Comptroller General.— Not later than March 31, 1996, the Comptroller General of the United States shall submit a report to the Congress and the head of each agency106 STAT. 4261 that is required to make expenditures under the STTR program that— (1) sets forth the Comptroller General’s assessment, with respect to each such agency, of— (A) the quality of research performed under funding agreements awarded by that agency under the STTR program since the beginning of the program; (B) whether or not the STTR program has affected the performance of that agency’s research programs; and (C) the commercial potential of research conducted under the STTR program, if sufficient data is available; (2) contains the Comptroller General’s assessment as to the effects of the STTR program, if any, on the research quality and goals of the SBIR program; and (3) determines the agencies and the federally-funded research and development centers’ compliance with the procedures developed under section 9(g)(10) of the Small Business Act, as amended by this section.