Federal Research

Preliminary Information on the Small Business Technology Transfer Program Gao ID: RCED-96-19 January 24, 1996

The nation's research institutions--its universities, federal laboratories, and nonprofit research organizations--account for about a quarter of all the scientists and engineers in the United States. To help move new knowledge from research institutions to industry, Congress authorized the Small Business Technology Transfer Pilot Program for three years, beginning in fiscal year 1994. Federal agencies rated the quality and commercial potential of winning proposals favorably in the program's first year. Technical experts, however, were cautious about the commercial potential, possibly because of the newness of the program. Agencies have taken steps to avoid potential conflicts of interest that might arise because of the close connection between federal agencies and research and development centers. In addition, the Departments of Defense and Energy, which accounted for almost all of the awards involving such centers, have taken steps to prevent the centers from using privileged information in preparing program proposals. Agency officials expressed differing views on the Technology Transfer Program's effect on the Small Business Innovation Research Program and other agency research and development, although none of them suggested any negative effects, such as competition between the two programs for quality proposals. The similarity of the two programs, however, raised questions about the need for a new program.

GAO found that: (1) federal agencies rated the quality and commercial potential of STTR proposals favorably in 1994, but technical experts were concerned about the commercial potential of STTR research because of the newness of the program; (2) agencies have taken actions to avoid potential conflicts of interest arising from R&D centers' involvement in STTR, such as restricting centers' participation, preventing R&D centers from using confidential information in preparing STTR proposals, and ensuring centers' use of outside peer reviews; (3) although agencies have differing views regarding the effects of STTR on SBIR, there is no evidence of competition between STTR and SBIR for quality proposals; (4) the need for STTR is unclear due to its similarity to SBIR, and it will take years to comprehensively evaluate STTR effectiveness; and (5) Congress believes that STTR addresses a core problem in national economic competitiveness and SBIR does not provide a direct mechanism for technology transfer.

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