107th Congress

Small Business Technology Transfer Program (STTR) Reauthorization -- Joint Hearing Before the House Small Business Subcommittees on Rural Enterprises, Agriculture, and Technology and on Workforce, Empowerment, and Government Programs -- June 20, 2001

Members Present

Representative John Thune (R-SD), Chairman, Subcommittee on Rural Enterprises, Agriculture, and Technology; Representative Tom Udall (D-NM), Ranking Member; Representative Juanita Millender-McDonald (D-CA), Ranking Member, Subcommittee on the Workforce, Empowerment and Government Programs; Representative David Phelps (D-IL); Representative Felix Grucci (R-NY); Representative Bill Shuster (R-PA).

Witnesses

Maurice Swinton, Assistant Administrator, Office of Technology, U.S. Small Business Administration; Tim Foreman, Acting Director, Small and Disadvantaged Business Utilization Office, Department of Defense; Walter Polansky, M.D., Office of Science, U.S. Department of Energy (DOE); JoAnne Goodnight, SBIR/STTR CoORDinator, NIH; Anthony Camarota, President and CEO, Avtek Industries, Inc.; Richard Carroll, CEO, Digital System Resources.

Summary

Purpose of Hearing: The House Committee on Small Business called a hearing to discuss reauthorization of the Small Business Technology Transfer Reauthorization Program (STTR). The NIH budget currently constitutes the second largest amount of Small Business Innovation Research (SBIR) and STTR funding available across the Federal Government. Authorization of the STTR program is set to expire at the end of fiscal year 2001.

Opening Statements

Chairman Thune referred to the STTR program as a success and pledged support for its reauthorization. Representative Millender-McDonald indicated that the program has fueled economic expansion. She expressed interest in finding ways to enhance partnerships for women-owned and minority-owned businesses. Ms. Millender-McDonald was also concerned about the small number of women-owned and minority-owned businesses that have received STTR awards. She would like the STTR program to extend into rural communities. Representative Udall also indicated his interest in increasing the number of women-owned and minority-owned businesses.

Statements of Witnesses

Maurice Swinton discussed the success of the STTR program and his Agency's efforts to increase the number of awards to rural areas and to women-owned and minority-owned businesses. Mr. Swinton cited a GAO report which gave the STTR program a favorable evaluation. He indicated that the Administration "supports reauthorization of the program for a 3-year duration and no increase to the percentage set aside for the program." He also expressed support for increasing Phase II award levels to $750,000.

Tim Foreman told the Committee about his Agency's successes with the STTR program. He said that the STTR program helps DoD to support military research and development efforts.

JoAnne Goodnight testified about the success of the NIH STTR program. She cited examples of successful STTR projects that have led to improvements in our nation's health. Administrative flexibility has been a major factor in the success of the NIH STTR program. Ms. Goodnight highlighted the differences between the SBIR and STTR programs and explained that the STTR program is uniquely poised to harness innovations from academic institutions.

Walter Polansky discussed the success of his Agency's STTR program. In 1998 and 1999 the application rate declined. In response, DoE began to issue SBIR and STTR solicitations together, giving businesses the opportunity to be considered for an award from both programs. This action led to a significant increase in the number of STTR applications received by DoE.

Anthony Camarota told the Committee about his company's success as a result of the STTR program. Mr. Camorata said that his company has used the STTR program to obtain resources that make the company competitive. Mr. Camarota advocated for increases in agency set-asides and Phase II award levels.

Richard Carroll praised SBA, DoD, and NIH for their effective management of the SBIR and STTR programs. The programs help small technology businesses to enter into the defense marketplace.

Questions

Representative Millender-McDonald: Representative Millender-McDonald asked Mr. Swinton how he can claim that SBA has reached out to disadvantaged businesses when the Watts neighborhood in her district is so economically depressed. Mr. Swinton discussed SBA's efforts to reach out to historically black colleges and universities as means for assisting disadvantaged businesses. SBA gives grants to these institutions so that they may hold conferences and seminars. During these seminars SBA trains small business owners to write successful proposals.

Ms. Millender-McDonald also asked Ms. Goodnight why NIH only holds one annual conference in a rural area. Ms. Goodnight described a recent bus tour where agency SBIR/STTR coordinators visited several rural states in order to conduct outreach. Ms. Millender-McDonald asked about the criteria for holding an outreach conference in a particular state. Ms. Goodnight said that participants in the conferences come from diverse geographic backgrounds and that the conferences are well attended, regardless of their geographic location.

Representative Udall: Representative Udall asked Mr. Polansky about DoE's rural outreach efforts and outreach efforts involving national laboratories. Mr. Polansky told the Committee that DoE participates in national and regional conferences to reach out to businesses in rural areas. He also said that laboratories have been successful in partnerships with small businesses. Mr. Udall asked Mr. Swinton about the number of STTR awards that have been given to businesses located in HUB Zones.

Representative Schuster: Representative Schuster asked Mr. Swinton for a listing of educational institutions in Pennsylvania that SBA has dealt with through the STTR program. He also asked for the number of products developed through the STTR program that have been commercialized. Representative Schuster wanted to know if SBA tracks the number of new businesses v. the number of existing businesses that receive STTR awards. He also asked Mr. Swinton to outline SBA's outreach activities.

Representative Phelps: Representative Phelps asked the panel how rural states or areas can get small business outreach conferences to come to their areas. Ms. Goodnight told the Committee that none of the SBIR and STTR funds may be used for administrative purposes, including outreach. Therefore, many agency coordinators spend significant time traveling around the country and attending regional conferences. If an entity has an interest in promoting small business, agencies are willing to work with them to set up outreach conferences.

Prepared by Dina Dariotis, OD/OLPA, June 21, 2001