Federal agencies lack data to fully assess commercial results from $4.4 billion in small-business research awards. A Government Accountability Office report found companies submitted required commercialization information for less than half of their prior awards.
The findings concern the Small Business Innovation Research and Small Business Technology Transfer programs. The report, published Sept. 29, made 14 recommendations, which agencies agreed with and which remain open.
Agencies Lack Data On Small-Business Commercial Results
The programs help small companies that might otherwise struggle to obtain capital for research and development. Eleven federal agencies participate, while the Small Business Administration oversees guidance and reporting to Congress.
Those agencies issued $4.4 billion in awards in fiscal 2024. That was the most recent data available during the review, according to Legis1’s account of the report.
Funding was divided almost equally between open topics and conventional topics. Under open topics, agencies identify broad interests and businesses propose potential needs and solutions.
Conventional topics instead specify the problems agencies want solved. Open-topic funding has produced innovations including space vehicles that repair satellites, the account says.
Related reporting covers federal contracting access for local firms. That separate coverage concerns businesses navigating government opportunities.
Reporting Requirements Are Not Consistently Communicated
At specified milestones, businesses must report commercial activity resulting from earlier awards to SBA. The agency maintains the information in a database required by law.
GAO found that some agencies do not clearly communicate those requirements to applicants. Some also do not ensure the required reports have been submitted.
Those omissions leave SBA with incomplete information for evaluating outcomes under both topic types. Agencies lack data that could help lawmakers assess whether the programs produce commercial results.
Better reporting compliance alone would not resolve every concern. SBA officials said they would still consider the information insufficiently reliable without validation and verification.
Officials identified possible improvements, including using Internal Revenue Service revenue figures or obtaining more resources to validate submissions. Changing the commercialization information SBA collects would require statutory changes.
Related coverage examines Senate review of SBA changes. That separate proceeding addresses other decisions affecting small businesses.
Fourteen Recommendations Address Reporting And Reliability
GAO examined more than 6,000 awards issued in fiscal 2024, using information from all 11 agencies and SBA. It also reviewed the commercialization database for awards issued from fiscal 2019 through fiscal 2024.
The review included statutory requirements and interviews with agency officials. GAO also interviewed representatives from 20 randomly selected businesses that received awards through the programs.
Congress began requiring the Department of Defense to release open-topic solicitations in fiscal 2023. The SBIR and STTR Extension Act of 2022 included a related GAO review requirement.
This report was the fourth in that series. Thirteen recommendations addressed clearer communication of reporting obligations and checking applicants’ compliance.
The Departments of Education, Homeland Security and Transportation each received two recommendations. NASA and the National Science Foundation also received two each.
Health and Human Services, the Environmental Protection Agency and the National Oceanic and Atmospheric Administration each received one. All 14 recommendations remained open in the report’s account.
Related reporting follows small-business funding operations. The federal research programs face a separate question: how to obtain reliable evidence of award outcomes.
Because agencies lack data to assess those outcomes fully, the remaining recommendation targets SBA. It calls for a legislative proposal to Congress or other action strengthening commercialization-data reliability.