Page 1 GAO-24-107155 SMALL BUSINESS INNOVATION RESEARCH
Small businesses have been a major source of technology development in the
U.S. economy but can face challenges obtaining the funding and support needed
to fully develop and commercialize their technologies.
The Small Business Innovation Research (SBIR) program was established in
1982 to increase the participation of small innovative companies in federally
funded research and development (R&D) and to stimulate small businesses’
technology development and commercialization. Federal agencies that
participate in the program support small businesses with grants or other types of
awards. The Small Business Administration (SBA) oversees, makes policies for,
and provides program guidance on the SBIR program to participating agencies.
In fiscal year (FY) 2023, agencies made over 5,000 SBIR awards valued at
nearly $4 billion to small businesses, according to SBA data.
The SBIR program has three phases. In Phase I, awarded small businesses
conduct R&D to determine the feasibility of ideas that may have commercial
potential. In Phase II, they receive additional SBIR funding to continue R&D,
which may include prototyping the technology. In Phase III, small businesses
work toward commercializing technologies developed under Phases I and II,
including further R&D or testing, without additional SBIR funding.
The Commercialization Assistance Pilot Program (CAPP), enacted into law in
2018, allows eligible small businesses to apply for an additional Phase II award
to continue their existing R&D. SBIR participating agencies are required to
implement CAPP, unless granted an exception by SBA. The Small Business Act
includes a provision for us to conduct a study of agencies’ activities under CAPP,
including the awards made and whether CAPP has led to small business growth.
In this report, we provide information on agencies’ implementation of CAPP,
awards made under the program, and small businesses’ experience with CAPP.
• Since CAPP was enacted in 2018, one agency has implemented CAPP: the
Department of Energy, whose Office of Science made seven CAPP awards
from fiscal years 2019 to 2024. Unless its period of authorization is extended,
CAPP will terminate on September 30, 2025.
• We found that most SBIR participating agencies did not implement CAPP
because (1) no small businesses in their SBIR program were eligible for a
CAPP award or (2) they already had a similar program in place. Some
agencies sought and received exceptions from the requirement to implement
CAPP.
U.S. Government Accountability Office
Small Business Innovation Research:
Most Agencies Did Not Implement
Required Commercialization Pilot
-24-107155
Report to Congressional Committees
25, 2024
