Federal Research:

Small Business Innovation Research Program Shows Success but Can Be Strengthened

T-RCED-92-45, Mar 31, 1992

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GAO discussed the Small Business Innovation Research Program (SBIR), focusing on: (1) whether the SBIR Program has met its goals; (2) the reasons for minority and disadvantaged businesses' low level of Phase III SBIR Program activity; (3) the level of foreign investment and attention that SBIR awardees have attracted; and (4) changes that could improve the program. GAO noted that: (1) the SBIR Program is showing success in Phase III activity even though many projects have not had sufficient time to achieve their full commercial potential; (2) SBIR-funded research and development is moving toward increased private-sector commercialization, since the majority of sales and additional developmental funding comes from the private sector; (3) the quality of SBIR research compared favorably with other federal research; (4) minority and disadvantaged businesses are achieving a lower level of activity than other companies in phase III and lower sales levels; (5) domestic involvement in SBIR is substantially higher than foreign involvement; and (6) project sales averages vary by agency. GAO believes that, to strengthen the program: (1) the Department of Defense needs to increase private-sector commercialization without weakening its commitment to meeting its own mission-related goals; (2) federal officials need to clarify the contractual procedures for entering into Phase III follow-on non-SBIR-funded production contracts; and (3) federal officials need to determine whether the company or the agency should perform additional post-program work.

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