Client Alert
SBIR Improvements -- Allowing Majority Investor Participation and More
January 23, 2012
On December 31, 2011, President Obama signed the National Defense Authorization Act for 2012, which included the SBIR/STTR Reauthorization Act of 2011 (the "Act"). H.R. 1540-526, Division E. Many changes, large and small, were made to the Small Business Innovation Research Program ("SBIR") and the Small Business Technology Transfer Program ("STTR"). The Small Business Administration ("SBA") is required to issue proposed regulations implementing the Act generally by April 30, 2012 and regarding fraud, waste, and abuse prevention by March 30, 2012.
For basic information about the SBIR/STTR programs, see theSBA's website.
Generally:
SBIR targets the entrepreneurial sector because that is where most innovation and innovators thrive. However, the risk and expense of conducting serious R&D efforts are often beyond the means of many small businesses. By reserving a specific percentage of federal R&D funds for small business, SBIR protects the small business and enables it to compete on the same level as larger businesses. SBIR funds the critical startup and development stages and it encourages the commercialization of the technology, product, or service, which, in turn, stimulates the U.S. economy.
STTR is a highly competitive program that reserves a specific percentage of federal R&D funding for award to small business and nonprofit research institution partners. Small business has long been where innovation and innovators thrive. But the risk and expense of conducting serious R&D efforts can be beyond the means of many small businesses.
Id.
The most interesting and complex change is to permit small business concerns that have majority investments by venture capital, hedge fund, or private equity firms, even if the investment firms are large businesses, receive a portion of SBIR awards.
Click here to read our entire client alert summarizing these changes.
Contact Information:
Should you have any questions about the contents of this alert, please feel free to contact Holly Emrick Svetz (HSvetz@wcsr.com); 703-394-2261 or any member of our Government Contracts Team.
Womble Carlyle client alerts are intended to provide general information about significant legal developments and should not be construed as legal advice on any specific facts and circumstances, nor should they be construed as advertisements for legal services.
IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice within this client alert is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in a client alert.
