Mar 11, 2009

In response to a provision of the American Recovery and Reinvestment Act that exempted $8.2 billion requested by the National Institutes of Health (NIH) from requirements of the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, United States Senate Committee on Small Business and Entrepreneurship Chair Mary Landrieu, D-La., and Ranking Member Olympia J. Snowe, R-Maine, today wrote to the Acting Secretary of the U.S. Department of Health and Human Services (HHS) requesting that the Department clarify how it will comply with the Small Business Act’s requirement that 2.8 percent of its overall extramural research and development dollars be awarded to small businesses.

“While the $8.2 billion allocated through Title VIII of the Recovery Act is relieved from specifically funding SBIR and STTR projects, the Act does not exempt the HHS from its continued statutory obligation of allocating a minimum of 2.5 percent and 0.3 percent, respectively, of its total extramural budget for research and development for SBIR and STTR projects,” the senators wrote. “At stake is as much as $229 million.”

Sens. Landrieu and Snowe emphasized the important role small businesses play in the technology and health care industries.

“The SBIR and STTR programs allow small research and development firms – our nation’s innovation lifeline – to create high-quality jobs and cutting-edge products and therefore are fundamental to our country’s economic recovery,” the senators wrote. “Consequently, it is of great concern to us that the NIH maximize the benefits of the Recovery funding and provide not less than the statutory percentages of the Department’s extramural research and development funding to the SBIR and STTR programs.”

The senators noted that when a similar SBIR exemption was provided to the Missile Defense Agency in 2001, the Department of Defense agreed to meet the statutory requirement by compensating from other agencies within DoD or funding the projects through MDA.

The senators asked for a response in writing from Acting Secretary Johnson by March 24, 2009.

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