In December, as part of the National Defense Authorization Act (HR 1540), President Obama signed into law a reauthorization of Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR).

One of only eight of 400 amendments to the National Defense Authorization Act, the SBIR/STTR reauthorization was unanimously agreed to by the Senate in a voice vote.

Prior to this legislation, the SBIR program survived through 14 temporary extensions since the fall of 2008. The STTR program was extended 11 times since 3Q 2009. With the new six-year, reauthorization, innovators and entrepreneurs stand to benefit from increased allocations and larger awards.

These programs provide critical off-balance sheet funding for startup companies to research, develop, and commercialize new technologies. Eleven government agencies set aside 2.5 percent of the more than $100 million they spend on research for SBIR/STTR grants.

An important addition to the reauthorization will allow companies with majority venture capital backing to compete for SBIR/STTR funds. Such companies have been shut out of SBIR/STTR competition for the last decade. There are some limitations on the percent of funds allocated to majority VC backed firms.

This change is especially meaningful to firms in the biotechnology industry, where drug development can take $1 billion and ten years or more.

The bill increases the SBIR allocation from 2.5 percent to 3.2 percent over time. The STTR allocation will be increased from .3 percent to .45 percent over six years. Decision time is shortened to 90 days.

In 2010, Oklahoma received seven awards totaling $1,938,097 in Department of Defense SBIR/STTR funding. Arkansas and Texas received 6 awards totaling $3,668,843 and 158 awards totaling $45,311,344, respectively.

As entrepreneurs and innovators, we owe it to our companies and our state to compete for a larger share of this national resource opportunity.

Some helpful links

NASA SBIR resource library – Sample forms and templates

Department of Defense’s Fast-Track Awards

DoD SBIR beyond Phase II Conference

DHS S&T SBIR Program: Cost Match Feature

Check out the Missile Defense Agency’s sample Phase II proposal.