Federal agencies help fund small businesses’ technology research and development through grants, contracts, and cooperative agreements.
A recent Government Accountability Office (GAO) report noted that most agencies allow businesses that apply for funding to define problems and pitch innovative solutions within broad topic areas for some or all of their awards – which could attract more diverse small businesses and promote competition for the best ideas.
Through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, agencies provide awards to small businesses to spur technological innovation, among other goals.
The government watchdog agency found that seven of 11 Federal agencies participating in the SBIR and STTR programs used open topics from fiscal years 2019 through 2021. In response to solicitations with open topics, small businesses submit proposals that both define research needs and propose solutions to address them.
Over the three-year period, open topic awards accounted for about 40 percent of all awards and $4.1 billion. The percentage of awards originating from open topics increased from 36 percent in 2019 to 40 percent in 2020 and 46 percent in 2021, GAO noted.
Open topic awards also went to a higher percentage of small businesses owned by veterans and individuals from socially and economically disadvantaged groups, compared to conventional topic awards – where agencies define the problems themselves and only solicit solutions.
However, four of the agencies GAO surveyed only used conventional topics, and based on several GAO analyses, businesses receiving conventional topic awards tended to receive multiple awards – which could indicate that open topics promote a more competitive environment.
