SBIR Policy Directive 2012
H. Section 9--Responsibilities of SBIR Participating Agencies and Departments
1. Section 9(c)--Discretionary Technical Assistance The Small Business Act currently permits agencies to contract with vendors, who provide technical assistance to SBIR awardees. Section 5121 of the Reauthorization Act amended this current requirement to permit agencies to contract with vendors for a period of up to 5 years. In addition, the Reauthorization Act states that the contract with the vendor cannot be based upon the total number of Phase I or Phase II awards. The contract, however, may be based on the total amount of awards for which actual technical assistance was provided. The directive addresses these new requirements.
The Reauthorization Act permits an agency to provide technical assistance to an SBIR awardee in an amount up to $5,000 per year (previously the limit had been $4,000 per award). This amount is in addition to the award amount.
The Reauthorization Act also permits the small business to elect to acquire the technical assistance services itself. Some believe that allowing a small business to obtain such services itself may create conflicts or potential abuses. To negate these concerns, SBA has required that the applicant must request to do so in its SBIR application, and must demonstrate that the individual or entity selected can provide the specific technical services needed. If the awardee demonstrates this requirement sufficiently, the Reauthorization Act states that the agency must permit the awardee to acquire the needed technical assistance itself, as an allowable cost. SBA has incorporated these new statutory requirements into the directive. SBA welcomes comments on this amendment and other ways it can limit potential abuses of the technical assistance allowance.
SBA amended the directive to address section 5104 of the Reauthorization Act, which requires that when one agency issues an SBIR Phase II award to an SBIR Phase I awardee of another agency, both agencies must issue a written determination that the topics of the awards are the same. The agencies must submit this report to SBA.
Section 5141 of the Reauthorization Act creates a pilot program that permits agencies to use SBIR funds for certain administrative purposes. Prior to this amendment, agencies were not permitted to use SBIR funds for any purpose other than awards and technical assistance to small businesses.
SBA has amended the SBIR Policy Directive to state that beginning on October 1, 2012, and ending on September 30, 2015, and upon establishment by SBA of the agency-specific performance criteria, SBA shall allow agencies to use no more than 3% of their SBIR funds for one or more specific activities. Specifically, the funding is to be used to assist with the substantial expansion in commercialization reporting; fraud, waste and abuse prevention; expanded reporting requirements; and other new activities required by the SBIR Program. The administrative funds are not to be used to replace the agency's current administrative funding for the SBIR Program (e.g., pay for current personnel) but to supplement the agency's current administrative funding (e.g. pay for new personnel to assist solely with SBIR funding agreements) and cover the costs of new program initiatives.
The Reauthorization Act requires agencies to use some of these funds to increase participation by socially and economically disadvantaged small businesses (SDBs) and women-owned small businesses (WOSBs) in the SBIR Program, and small businesses in states with a historically low level of participation in the program. The agency may request a waiver of this statutory requirement by submitting a written statement explaining why there is a sufficient need for the waiver, and that the outreach objectives of the agency are already being met. The directive addresses this requirement.
The Reauthorization Act states that agencies may not use the SBIR funds for any of these administrative purposes until SBA establishes performance criteria to measure the benefits of using the funds and to ultimately determine whether the pilot program should be continued, discontinued, or made permanent. The Policy Directive explains that in order to help SBA establish the agency- specific performance criteria, each agency must submit an annual work plan to SBA at least 30 calendar days prior to the start of a fiscal year. The work plan must set forth a prioritized list of initiatives to be supported in alignment with reporting requirements, the estimated amounts to be spent on each initiative, milestones for implementing the initiatives, the expected results to be achieved, and the assessment metrics for each initiative. The work plan must explain how these initiatives are above and beyond the agency's current practices and how they will enhance the program.
After review of the work plan, SBA will establish the performance metrics for that fiscal year by which use of these funds will be evaluated for that fiscal year. SBA will create a simplified template for agencies to use when creating their work plans. Agencies will submit work plans to SBA each fiscal year the pilot program is in operation.
The Policy Directive also explains that any activities relating to fraud, waste and abuse prevention in the work plan must be coordinated with the agency's Office of Inspector General (OIG). If the agency allocates more than $50,000,000 to its SBIR Program for a fiscal year, it may share some of these administrative funds with its OIG when the OIG performs fraud, waste and abuse activities for the agency's SBIR Program.
SBA also amended this section of the Policy Directive to address the new statutory requirement set forth in section 5109 of the Reauthorization Act that permits agencies to subcontract a portion of an SBIR funding agreement to a Federal laboratory. Although agencies may permit small businesses to subcontract a portion of the work to the Federal laboratory without requesting a waiver from SBA, the agency cannot require a small business to subcontract a portion of the award to the laboratory.
Section 5143 of the Reauthorization Act requires SBA to amend the Policy Directive to include measures to prevent fraud, waste and abuse in the SBIR Program. SBA has amended the directive to define and provide examples of fraud, waste and abuse as it relates to the SBIR Program. In addition, SBA has amended the directive to state that each SBIR agency must take certain measures to reduce fraud, waste and abuse in the program.
For example, at the recommendation of the Council for Inspectors General on Integrity and Efficiency, the SBA has included the requirement for certification by the small business during the life cycle of the funding agreement. As discussed above, this means that in addition to requiring a certification at the time of award, agencies must request certifications by the small business concern during certain points in time of a Phase I and Phase II funding agreement to ensure that the awardee is in compliance with the program's requirements.
The directive explains that agencies must also take other measures to reduce fraud, waste and abuse, such as: (1) Including on their Web site and in each solicitation any telephone hotline number or web-based method for how to report fraud, waste and abuse; (2) designating at least one individual to serve as the liaison for the SBIR Program, OIG and the agency's Suspension and Debarment Official (SDO); (3) including on the agency's Web site successful prosecutions of fraud, waste and abuse in the SBIR Program (relating to any SBIR agency); and (4) creating or ensuring there is a system to enforce accountability (e.g., creating templates for referrals to the OIG or SDO), among other things. In addition, the directive requires the agencies to work with their specific OIG, who will help establish fraud detection indicators. For example, one agency, acting in concert with its OIG, uses a commercial software that searches for redundancy or plagiarism in the applications submitted. This is one form of a fraud detection indicator.
SBA welcomes comments on other ways agencies may reduce fraud, waste and abuse in the program.
Section 5124 of the Reauthorization Act instructs the Office of Science and Technology Policy (OSTP) to create the Interagency Policy Committee, comprised of OSTP, the SBIR and STTR participating agencies and SBA. The purpose of this committee is to review issues relating to the SBIR program, such as commercialization assistance, and make recommendations on ways to improve the program. SBA has amended the directive to address this new committee.
6. Section 9(i)--National Academy of Science Report Section 5137 of the Reauthorization Act requires the National Academy of Sciences (NAS) to continue its study of the SBIR Program. NAS must consult with and consider the views of SBA, as well as other interested parties, when drafting the report. In addition, the statute requires certain agencies, in consultation with SBA, to enter into an agreement with NAS in furtherance of the report. SBA has amended the Policy Directive to address this new requirement, since NAS will be issuing the report not later than 4 years after December 31, 2011 and then every subsequent four years. Details about the study are set forth in Appendix X.
unofficial copy annotated by Zyn Systems