Small Business Innovation Research
Observations on Agencies' Data Collection and Eligibility Determination Efforts Gao ID: GAO-09-956T August 6, 2009The Small Business Innovation Development Act of 1982 established the Small Business Innovation Research program (SBIR) to stimulate technological innovation, use small businesses to meet federal research and development (R&D) needs, foster and encourage participation by minority and disadvantaged persons in technological innovation, and increase private sector commercialization of innovations derived from federal R&D. Since the program's inception, GAO has conducted numerous reviews of the SBIR program. This statement summarizes GAO's past findings on the SBIR program's (1) successes and challenges, (2) data collection issues that affect program monitoring and evaluation, and (3) how agencies make eligibility determinations for the program. GAO is not making any new recommendations in this statement.
Between July 1985 and June 1999, GAO found that the SBIR program was achieving its goals to enhance the role of small businesses in federal R&D, stimulate commercialization of research results, and support the participation of small businesses owned by women and/or disadvantaged persons. More specifically, GAO found that throughout the life of the program, awards have been based on technical merit and are generally of good quality. In addition, the SBIR program successfully attracts many qualified companies, has had a high level of competition, consistently has had a high number of first-time participants, and attracts hundreds of new companies annually. Further, SBIR has helped serve agencies' missions and R&D needs; although GAO found that agencies differ in the emphasis they place on funding research to support their mission versus more generalized research. During these reviews GAO also identified areas of weakness and made recommendations that could strengthen the program further. Many of these recommendations have been either fully or partially addressed by the Congress in various reauthorizations of the program or by the agencies themselves. For example, in 2005, GAO found that the issue of how to assess the performance of the SBIR program remains somewhat unresolved after almost two decades, and identified data and information gaps that make assessment of the SBIR program a challenge. Many of the solutions to improve the SBIR program could be addressed, in part, by collecting better data and establishing a government-use database, so that SBA and participating agencies can share information and enhance their efforts to monitor and evaluate the program. However, in 2006, GAO reported that SBA was 5 years behind schedule in complying with a congressional mandate to develop a government-use database that could facilitate agencies' monitoring and evaluation efforts. Moreover, the information that SBA was collecting for the database was incomplete and inconsistent, thereby limiting its usefulness. In 2006, SBA told GAO that it expected to have the government-use database operational early in fiscal year 2007. However, the database did not become operational until October 2008 and currently contains 2 years of new data, according to an SBA official. The database also does not permit information to be entered in an inconsistent format. In 2006, GAO also found that SBA, NIH, and DOD focus on a few select criteria to determine the eligibility of applicants for SBIR awards. GAO reported that both NIH and DOD largely relied on applicants to self-certify that they met all of the SBIR eligibility criteria as part of their SBIR applications, although both made additional efforts to ensure the accuracy of the information when they observed discrepancies in the applications. When the agencies were unable to verify the eligibility of an applicant, they referred the application to SBA for an eligibility determination. GAO found that when SBA finds an applicant to be ineligible for the SBIR program, it places this information on its Web site but does not consistently identify that the ineligibility determination was made for the SBIR program.
GAO-09-956T, Small Business Innovation Research: Observations on Agencies' Data Collection and Eligibility Determination Efforts
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Testimony:
Before the Committee on Commerce, Science, and Transportation, U.S.
Senate:
United States Government Accountability Office:
GAO:
For Release on Delivery:
Expected at 2:30 a.m. EDT:
Thursday, August 6, 2009:
Small Business Innovation Research:
Observations on Agencies' Data Collection and Eligibility Determination
Efforts:
Statement of Patricia A. Dalton, Managing Director:
Natural Resources and Environment:
GAO-09-956T:
GAO Highlights:
Highlights of GAO-09-956T, a testimony before the Committee on
Commerce, Science, and Transportation, U. S. Senate.
Why GAO Did This Study:
The Small Business Innovation Development Act of 1982 established the
Small Business Innovation Research program (SBIR) to stimulate
technological innovation, use small businesses to meet federal research
and development (R&D) needs, foster and encourage participation by
minority and disadvantaged persons in technological innovation, and
increase private sector commercialization of innovations derived from
federal R&D. Since the program‘s inception, GAO has conducted numerous
reviews of the SBIR program. This statement summarizes GAO‘s past
findings on the SBIR program‘s (1) successes and challenges, (2) data
collection issues that affect program monitoring and evaluation, and
(3) how agencies make eligibility determinations for the program.
GAO is not making any new recommendations in this statement.
What GAO Found:
Between July 1985 and June 1999, GAO found that the SBIR program was
achieving its goals to enhance the role of small businesses in federal
R&D, stimulate commercialization of research results, and support the
participation of small businesses owned by women and/or disadvantaged
persons. More specifically, GAO found that throughout the life of the
program, awards have been based on technical merit and are generally of
good quality. In addition, the SBIR program successfully attracts many
qualified companies, has had a high level of competition, consistently
has had a high number of first-time participants, and attracts hundreds
of new companies annually. Further, SBIR has helped serve agencies‘
missions and R&D needs; although GAO found that agencies differ in the
emphasis they place on funding research to support their mission versus
more generalized research. During these reviews GAO also identified
areas of weakness and made recommendations that could strengthen the
program further. Many of these recommendations have been either fully
or partially addressed by the Congress in various reauthorizations of
the program or by the agencies themselves. For example, in 2005, GAO
found that the issue of how to assess the performance of the SBIR
program remains somewhat unresolved after almost two decades, and
identified data and information gaps that make assessment of the SBIR
program a challenge.
Many of the solutions to improve the SBIR program could be addressed,
in part, by collecting better data and establishing a government-use
database, so that SBA and participating agencies can share information
and enhance their efforts to monitor and evaluate the program. However,
in 2006, GAO reported that SBA was 5 years behind schedule in complying
with a congressional mandate to develop a government-use database that
could facilitate agencies‘ monitoring and evaluation efforts. Moreover,
the information that SBA was collecting for the database was incomplete
and inconsistent, thereby limiting its usefulness. In 2006, SBA told
GAO that it expected to have the government-use database operational
early in fiscal year 2007. However, the database did not become
operational until October 2008 and currently contains 2 years of new
data, according to an SBA official. The database also does not permit
information to be entered in an inconsistent format.
In 2006, GAO also found that SBA, NIH, and DOD focus on a few select
criteria to determine the eligibility of applicants for SBIR awards.
GAO reported that both NIH and DOD largely relied on applicants to self-
certify that they met all of the SBIR eligibility criteria as part of
their SBIR applications, although both made additional efforts to
ensure the accuracy of the information when they observed discrepancies
in the applications. When the agencies were unable to verify the
eligibility of an applicant, they referred the application to SBA for
an eligibility determination. GAO found that when SBA finds an
applicant to be ineligible for the SBIR program, it places this
information on its Web site but does not consistently identify that the
ineligibility determination was made for the SBIR program.
View [hyperlink, http://www.gao.gov/products/GAO-09-956T] or key
components. For more information, contact Patricia Dalton at (202) 512-
3841 or daltonp@gao.gov.
[End of section]
Mr. Chairman and Members of the Committee:
We are pleased to be here today to testify on our past work on the
Small Business Innovation Research (SBIR) program. As you know, to be
competitive in the global economy, the United States relies heavily on
innovation through research and development (R&D). Recognizing the
potential of small businesses to be a source of significant innovation,
the Congress passed the Small Business Innovation Development Act of
1982.[Footnote 1] The act established the SBIR program to stimulate
technological innovation, use small businesses to meet federal R&D
needs, foster and encourage participation by minority and disadvantaged
persons in technological innovation, and increase private sector
commercialization of innovations derived from federal R&D. The act
provided for a three-phased program: phase I to determine the
feasibility and scientific and technical merit of a proposed research
idea; phase II to further develop the idea; and phase III to
commercialize the resulting product or process with no further SBIR
funding.
Federal agencies that have budgets of $100 million for research
conducted by others, called extramural research, are required to use
2.5 percent of these budgets to establish and operate an SBIR program.
Currently, 11 federal agencies participate in the SBIR program. Each
agency manages its own program, including targeting research areas,
reviewing proposed projects, and making research awards through grants,
contracts, or cooperative agreements. The Small Business Administration
(SBA) plays a central administrative role by, for example, issuing
policy directives to the participating federal agencies, collecting
data from participating agencies on awards and recipients, and
reporting program results annually to the Congress. In 2005 awards from
three agencies--the Department of Defense (DOD), National Institutes of
Health (NIH), and National Aeronautics and Space Agency (NASA)--
accounted for the majority of SBIR funds. From its inception in fiscal
year 1983 through fiscal year 2004, federal agencies had awarded over
$17 billion for more than 82,000 projects.
Since it was established in 1982, the SBIR program has been
reauthorized and modified by the Congress at various times. For
example, the Small Business Research and Development Enhancement Act of
1992 directed SBA and participating agencies to, among other things,
emphasize the goal of increasing commercialization of research results
and to improve the government's dissemination of program-related data.
[Footnote 2] As a result, agencies were required to include
commercialization potential as a criterion for selecting award
recipients. During this same period, SBA began to develop a publicly
available database, known as Tech-Net, that contained information on
all awards made through the SBIR program. The Tech-Net database is
intended to be, among other things, an electronic gateway of technology
information and resources for researchers, scientists, and government
officials about federally funded, leading edge technology research. The
Small Business Innovation Research Program Reauthorization Act of 2000
formalized this database by requiring SBA to develop, maintain, and
make available to the public a searchable, up-to-date, electronic
database that contained SBIR award information.[Footnote 3] The 2000
reauthorization act also required SBA to develop and maintain another
restricted government database that would contain additional
information on commercialization not contained in the public Tech-Net
database, thereby allowing better evaluations of the SBIR program on an
ongoing basis.[Footnote 4] This database was to be established by mid-
2001 and made available only to government agencies and certain other
authorized users. SBA has established, through a policy directive, a
series of data elements for all the agencies to submit for its public
Tech-Net database.[Footnote 5] The SBIR program is currently being
considered by the Congress for reauthorization, and both the House and
Senate have recently passed bills to reauthorize the program.
In this context, you asked us to summarize the successes and challenges
that our past work has identified about the SBIR program, summarize the
concerns we have previously identified on SBA's efforts to establish an
interagency database that includes information on SBIR applicants and
awards, and describe the process that agencies use to determine the
eligibility of SBIR applicants for the program. This statement is based
largely on our prior reviews of the SBIR program and contacts with SBA
officials. Our work on the prior reviews was conducted in accordance
with generally accepted government auditing standards. Those standards
require that we plan and perform the audits to obtain sufficient,
appropriate evidence to provide a reasonable basis for our findings and
conclusions based on our audit objectives. We believe that the evidence
we obtained for those reviews provided a reasonable basis for our
findings and conclusions based on our audit objectives.
Summary:
Over the life of the SBIR program, we have reviewed and reported on its
implementation many times. For example, between July 1985 and June
1999, we found that the SBIR program is achieving its goals to enhance
the role of small businesses in federal R&D, stimulate
commercialization of research results, and support the participation of
small businesses owned by women and/or disadvantaged persons.[Footnote
6] Participating agencies and companies that we surveyed during our
reviews generally rated the program highly. We also identified areas of
weakness and made recommendations that could strengthen the program
further. Many of our recommendations for program improvements have been
either fully or partially addressed by the Congress when it
reauthorized the program or by the agencies themselves. For example, in
2005, we noted one issue that continued to remain somewhat unresolved
after almost two decades of program implementation--how to assess SBIR
program's performance--and we identified data and information gaps that
make an assessment of the SBIR program a challenge. In 2006, we
conducted two reviews of the SBIR program.[Footnote 7] The first review
described how DOD, NIH, and SBA verify the eligibility of SBIR
applicants; and the second examined SBA's and eight participating
agencies' efforts to collect data and establish a government-use
database that would facilitate monitoring and evaluation of the
program. In summary, we found the following:
* SBA had not met the congressional mandate to develop and implement,
by June 2001, a government-use database for monitoring and evaluating
the SBIR program. SBA officials told us that they had been unable to
meet the requirement to implement such a database by 2001 because of
management changes that had occurred at the agency and because of
budgetary constraints, but expected to have it operational by early in
fiscal year 2007. However, this database did not become operational
until October 2008, according to an SBA official.
* Although federal agencies participating in the SBIR program annually
submit a wide range of descriptive information to SBA about each award
they make, they were not consistently providing the full range of
required data elements. As a result, certain sections of the Tech-Net
database needed for comprehensive program evaluation were incomplete.
Agencies cited a variety of reasons for not providing all of the data
elements, including frequent changes in SBA's data requirements and
differences in the types of data agencies collect versus the types of
data that SBA outlined in its policy directive.
* Some participating agencies were not submitting SBIR award data in
the standard format established in SBA's policy directive. For example,
almost a quarter of the data provided by five participating agencies in
2004 and 2005 did not comply with SBA's formatting guidance. In light
of the problems we identified with the Tech-Net database and the
implications for these errors to limit evaluations of the SBIR program,
we recommended that SBA work with participating agencies to strengthen
efforts to improve the quality of the data. According to an SBA
official, as of October 2008, agencies can directly enter SBIR-related
data into the Tech-Net database over the Internet in a way that does
not accept incorrectly formatted data.
* To determine a firm's eligibility for the SBIR program, DOD, NIH, and
SBA focus primarily on criteria relating to ownership, for-profit
status, and the number of employees. The agencies primarily rely on the
applicants' self-certification of eligibility, although in some cases
they may take additional steps to verify this information. When agency
officials are unable to ensure the accuracy of an applicant's
information, they refer the matter to SBA. After SBA makes an
eligibility determination, it makes information about ineligible firms
available on its Web site, but it does not always indicate that the
determination was for SBIR purposes. Once agencies receive SBA's
determination of eligibility, they may or may not have a process to
share this information across the agency.
Successes and Challenges of the SBIR Program:
Our reviews of the SBIR program between 1985 and 1999 found numerous
examples of program successes such as the following:
* Funding high-quality research. Throughout the life of the program,
awards have been based on technical merit and are generally of good
quality.
* Encouraging widespread competition. The SBIR program successfully
attracts many qualified companies, has had a high level of competition,
consistently has had a high number of first-time participants, and
attracts hundreds of new companies annually.
* Providing effective outreach. SBIR agencies consistently reach out to
foster participation by women-owned or socially and economically
disadvantaged small businesses by participating in regional small
business conferences and workshops targeting these types of small
businesses.
* Increasing successful commercialization. At various points in the
life of the program we have reported that SBIR has succeeded in
increasing private sector commercialization of innovations.
* Helping to serve mission needs. SBIR has helped serve agencies'
missions and R&D needs, although we found that agencies differ in the
emphasis they place on funding research to support their mission versus
more generalized research.
Our reviews of the SBIR program during that time have also identified a
number of areas of weakness that, over time, have been either fully or
partially addressed by the Congress in reauthorizing the program or by
the agencies themselves. For example,
* Duplicate funding. In 1995,[Footnote 8] we identified duplicate
funding for similar, or even identical, research projects by more than
one agency. A few companies received funding for the same proposals
two, three, and even five times before agencies became aware of the
duplication. Contributing factors included the fraudulent evasion of
disclosure by companies applying for awards, the lack of a consistent
definition for key terms such as "similar research," and the lack of
interagency sharing of data on awards. To address these concerns, we
recommended that SBA take three actions: (1) determine if the
certification form needed to be improved and make any necessary
revisions, (2) develop definitions and guidelines for what constitutes
"duplicative" research, and (3) provide interagency access to current
information regarding SBIR awards In response to our recommendations,
SBA strengthened the language agencies use in their application
packages to clearly warn applicants about the illegality of entering
into multiple agreements for essentially the same effort. In addition,
SBA planned to develop Internet capabilities to provide SBIR data
access for all of the agencies.
* Inconsistent interpretations of extramural research budgets. In 1998,
[Footnote 9] we found that while agency officials adhered to SBIR's
program and statutory funding requirements, they used differing
interpretations of how to calculate their "extramural research
budgets." As a result, some agencies were inappropriately including or
excluding some types of expenses. We recommended that SBA provide
additional guidance on how participating agencies were to calculate
their extramural research budgets. The Congress addressed this program
weakness in 2000, when it required that the agencies report annually to
SBA on the methods used to calculate their extramural research budgets.
* Geographical concentration of awards. In 1999,[Footnote 10] in
response to congressional concerns about the geographical concentration
of SBIR awards, we reported that companies in a small number of states,
especially California and Massachusetts, had submitted the most
proposals and won the majority of awards. The distribution of awards
generally followed the pattern of distribution of non-SBIR expenditures
for R&D, venture capital investments, and academic research funds. We
reported that some agencies had undertaken efforts to broaden the
geographic distribution of awards. In the 2000 reauthorization of the
program, the Congress directed the SBA Administrator to establish the
Federal and State Technology (FAST) Partnership Program to help
strengthen the technological competitiveness of small businesses,
especially in those states that receive fewer SBIR grants. The FAST
Program was not reauthorized when it expired in 2005. In 2006 when we
looked at the geographical concentration of awards made by DOD and NIH,
we found that while a firm in every state received at least one SBIR
award from both agencies, SBIR awards continued to be concentrated in a
handful of states and about one third of awards had been made to firms
in California and Massachusetts.[Footnote 11]
* Clarification on commercialization and other SBIR goals. Finally, in
2000, the Congress directed the SBA Administrator to require companies
applying for a phase II award to include a commercialization plan with
their SBIR proposals. This addressed our continuing concern that
clarification was needed on the relative emphasis that agencies should
give to a company's commercialization record and SBIR's other goals
when evaluating proposals. In addition, in 2001, SBA initiated efforts
to develop standard criteria for measuring commercial and other
outcomes of the SBIR program and incorporate these criteria into its
Tech-Net database. In fiscal year 2002, SBA further enhanced the
reporting system to include commercialization results that would help
establish an initial baseline rate of commercialization. In addition,
small business firms participating in the SBIR program are required to
provide information annually on sales and investments associated with
their SBIR projects.
SBIR Tech-Net Database Limitations:
Many of the solutions cited above to improve and strengthen the SBIR
program relied to some extent on the collection of data or the
establishment of a government-use database, so that SBA and
participating agencies could share information and enhance their
efforts to monitor and evaluate the program. However, in 2006,[Footnote
12] we reported that SBA was 5 years behind schedule in complying with
the congressional mandate to develop a government database that could
facilitate agencies' monitoring and evaluation of the program. We also
reported that the information SBA was collecting for the database was
incomplete and inconsistent, thereby limiting its usefulness for
program evaluations. Specifically, we identified the following concerns
with SBA's data-gathering efforts:
* SBA had not met its obligation to implement a restricted government-
use database that would allow SBIR program evaluation as directed by
the 2000 SBIR reauthorization act. As outlined in the legislation, SBA,
in consultation with federal agencies participating in the SBIR
program, was to develop a secure database by June 2001 and maintain it
for program evaluation purposes by the federal government and certain
other entities. SBA planned to meet this requirement by expanding the
existing Tech-Net database to include a restricted government-use
section that would be accessible only to government agencies and other
authorized users. In constructing the government-use section of the
database, SBA planned to supplement data already gathered for the
public-use section of the Tech-Net database with information from SBIR
recipients and from participating agencies on commercialization
outcomes for phase II SBIR awards. However, according to SBA officials,
the agency was unable to meet the statutory requirement, primarily
because of increased security and other information technology project
requirements, agency management changes, and budgetary constraints.
When we reported on this lack of compliance with the database mandate,
SBA told us that it anticipated having the government-use section of
the Tech-Net database operational early in fiscal year 2007. However,
according to an SBA official, the database became operational in
October 2008, and agencies have begun to provide data on their SBIR
programs using the Internet.
* While federal agencies participating in the SBIR program submitted a
wide range of descriptive award information to SBA annually, these
agencies did not consistently provide all of the required data
elements. As outlined in SBA's policy directive, each year, SBIR
participating agencies are required to collect and maintain information
from recipients and provide it to SBA so that it can be included in the
Tech-Net database. Specifically, the policy directive established over
40 data elements for participating agencies to report for each SBIR
award they make; a number of these elements are required. These data
include award-specific information, such as the date and amount of the
award, an abstract of the project funded by the award, and a unique
tracking number for each award. Participating agencies are also
required to provide data about the award recipient, such as gender and
socio-economic status, and information about the type of firms that
received the awards, such as the number of employees and geographic
location. Much of the data participating agencies collected are
provided by the SBIR applicants when they apply for an award. Agencies
provide additional information, such as the grant/contract number and
the dollar amount of the award, after the award is made. For the most
part, all of the agencies we reviewed in 2006 provided the majority of
the data elements outlined in the policy directive. However, some of
the agencies were not providing the full range of required data
elements. As a result, SBA did not have complete information on the
characteristics of all SBIR awards made by the agencies. SBA officials
told us that agencies did not routinely provide all of the data
elements outlined in the policy directive because either they did not
capture the information in their agency databases or they were not
requesting the information from the SBIR applicants. Officials at the
participating agencies cited additional reasons for the incomplete data
they provided to SBA. For example, some officials noted that SBA's Tech-
Net annual reporting requirements often change and others said that if
the company or contact information changes and the SBIR recipient fails
to provide updated information to the agency, the agency cannot provide
this information to SBA.
* Participating agencies were providing some data that are inconsistent
with SBA's formatting guidance, and while some of these inconsistencies
were corrected by SBA's quality assurance processes, others were not.
In 2006,[Footnote 13] we determined that almost a quarter of the data
provided by five of the eight agencies we reviewed was incorrectly
formatted for one or more fields in the Tech-Net database. As a result,
we concluded that these inconsistent or inaccurate data elements
compromised the value of the database for program evaluation purposes.
SBA's quality assurance efforts focus on obtaining complete and
accurate data for those fields essential to tracking specific awards,
such as the tracking number and award amount, rather than on those
fields that contain demographic information about the award recipient.
We found that SBA electronically checked the data submitted by the
participating agencies to locate and reformat inconsistencies, but it
did not take steps to ensure that all agency-provided data were
accurate and complete. We also determined that inconsistencies or
inaccuracies could arise in certain data fields because SBA interpreted
the absence of certain data elements as a negative entry without
confirming the accuracy of such an interpretation with the agency. As
we reported in 2006, such inaccuracies and inconsistencies were a
concern because information in the Tech-Net database would be used to
populate the government-use section of the database that SBA was
developing (as discussed above) to support SBIR program evaluations.
However, at the time of our review, SBA had no plans to correct any of
the errors or inconsistencies in the database that related to the
historical data already collected. As a result, we concluded that the
errors in the existing database would migrate to the government-use
section of the database and would compromise the usefulness of the
government-use database for program evaluation and monitoring purposes.
To address the concerns that we identified with regard to the quality
of the data that SBA was collecting for the Tech-Net database, we
recommended in our 2006 report that SBA work with the participating
agencies to strengthen the completeness, accuracy, and consistency of
its data collection efforts. According to an SBA official, the database
is currently operational and agencies have entered data for fiscal
years 2007 and 2008 over the Internet. Moreover, according to this
official, the system is set up in such a way that it does not accept
incorrectly formatted data.
Agencies Focus on Select Awardee Eligibility Criteria:
In 2006,[Footnote 14] we also found that SBA and some participating
agencies focused on a few select criteria for determining applicants'
eligibility for SBIR awards. Specifically, we reviewed DOD's, NIH's,
and SBA's processes to determine eligibility of applicants for the SBIR
program and found that they focused largely on three SBIR criteria in
their eligibility reviews--ownership, size in terms of the number of
employees, and for-profit status of SBIR applicants. Although agency
officials also told us that they consider information on the full range
of criteria, such as whether the principal investigator is employed
primarily by the applying firm, and the extent to which work on the
project will be performed by others.
Moreover, we found that both NIH and DOD largely relied on applicants
to self-certify that they met all of the SBIR eligibility criteria as
part of their SBIR applications. For example, at NIH, applicants
certified that they met the eligibility criteria by completing a
verification statement when NIH notified them that their application
had been selected for funding but before NIH made the award. The
verification statement directs applicants to respond to a series of
questions relating to for-profit status, ownership, number of
employees, where the work would be performed, and the primary
employment of the principal investigator, among others. Similarly,
DOD's cover sheet for each SBIR application directs applicants to
certify that they met the program's eligibility criteria. NIH and DOD
would not fund applications if the questions on their agency's
verification statement or cover sheet were not answered. Both NIH and
DOD also warned applicants of the civil and criminal penalties for
making false, fictitious, or fraudulent statements. In some cases the
agencies made additional efforts to ensure the accuracy of the
information applicants provided when they observed certain
discrepancies in the applications.
In 2006,[Footnote 15] we reported that when officials at the agencies
had unresolved concerns about the accuracy of an applicant's
eligibility information, they referred the matter to SBA to make an
eligibility determination. We found that when SBA received a letter
from the agency detailing its concerns, SBA officials contacted the
applicants and asked them to re-certify their eligibility status and
might request additional documentation on the criteria of concern. Upon
making a determination of eligibility, SBA then notified the official
at the inquiring agency, and the applicant, of its decision.
Although, SBA made the information about firms it found ineligible
publicly available on its Web site so that all participating agencies
and the public could access the information, we found that it did not
consistently include information on the Web site identifying whether or
not the determination was for the SBIR program. An SBA official told us
the agency planned to include such information on its Web site more
systematically before the end of fiscal year 2006. Once the agencies
received information about applicants' eligibility they also had
different approaches for retaining and sharing this information. For
example, while both NIH and DOD noted the determination of
ineligibility in the applicant's file, NIH also centrally tracked
ineligible firms and made this information available to all of its
institutes and centers that make SBIR awards. In contrast, DOD did not
have a centralized process to share the information across its awarding
components, although DOD officials told us it was common practice for
awarding components to share such information electronically.
In conclusion, Mr. Chairman, while the SBIR program is generally
recognized as a successful program that has encouraged innovation and
helped federal agencies achieve their R&D goals, it has continued to
suffer from some long-standing evaluation and monitoring issues that
are made more difficult because of a lack of accurate, reliable, and
comprehensive information on SBIR applicants and awards. The Congress
recognized the need for a comprehensive database in 2000 when it
mandated that SBA develop a government-use database. Although SBA did
not meet its statutorily mandated deadline of June 2001, the database
has been operational since October 2008, and contains limited new
information but may also contain inaccurate historical data.
Mr. Chairman, this concludes my prepared statement. I would be happy to
respond to any questions that you or other members of the Committee may
have.
GAO Contact and Staff Acknowledgments:
For further information about this statement, please contact me at
(202) 512-3841 or at daltonp@gao.gov. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last
page of this statement. Vondalee Hunt, Anu Mittal, and Cheryl Williams
also made key contributions to this statement.
[End of section]
Footnotes:
[1] Pub. L. No. 97-219 (1982)
[2] Pub. L. No. 102-564 (1992).
[3] Pub. L. No. 106-554, App. I, Tit. I (2000).
[4] Throughout this statement we refer to this database as the
government-use database.
[5] 67 Fed. Reg. 60,072 (Sept. 24, 2002).
[6] GAO, Federal Research: Observations on the Small Business
Innovation Research Program, [hyperlink,
http://www.gao.gov/products/GAO-05-861T] (Washington, D.C.: June 28,
2005).
[7] GAO, Small Business Innovation Research: Information on Awards Made
by NIH and DoD in Fiscal Years 2001 through 2004, [hyperlink,
http://www.gao.gov/products/GAO-06-565] (Washington, D.C.; April 14,
2006) and GAO, Small Business Innovation Research: Agencies Need to
Strengthen Efforts to Improve the Completeness, Consistency, and
Accuracy of Awards Data, [hyperlink,
http://www.gao.gov/products/GAO-07-38] (Washington, D.C.; October 19,
2006).
[8] GAO, Federal Research: Interim Report on the Small Business
Innovation Research Program, [hyperlink,
http://www.gao.gov/products/GAO/RCED-95-59] (Washington, D.C.; March 8,
1995).
[9] GAO, Federal Research: Observations on the Small Business
Innovation Research Program, [hyperlink,
http://www.gao.gov/products/GAO/RCED-98-132] (Washington, D.C.; April
17, 1998).
[10] GAO, Federal Research: Evaluation of Small Business Innovation
Research Can be Strengthened, [hyperlink,
http://www.gao.gov/products/GAO/RCED-99-114] (Washington, D.C.; June 4,
1999).
[11] [hyperlink, http://www.gao.gov/products/GAO-06-565].
[12] [hyperlink, http://www.gao.gov/products/GAO-07-38].
[13] [hyperlink, http://www.gao.gov/products/GAO-07-38].
[14] [hyperlink, http://www.gao.gov/products/GAO-06-565].
[15] [hyperlink, http://www.gao.gov/products/GAO-06-565].
[End of section]
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