1. The use of quotas to reduce multiple winners should be reconsidered.

    1. In the case of multiple award winners who qualify in terms of the selection criteria, the acceptance/rejection decision should be based on their performance on past grants rather than on the number of grants received. Firms able to provide quality solutions to solicitations should not be excluded, a priori, from the program except on clear and transparent criteria (e.g., quality of research and/or commercialization performance).

    2. Avoid imposing quotas on applications unless there are compelling reasons to do so. Specifically, remove the limit of four on the number of proposals per solicitation per firm. Such limitations run the risk of limiting innovative ideas and of unnecessarily restricting the opportunity among prospective principal investigators in the larger eligible small companies.

    3. In order to continue to attract new entrants and to help avoid concentrations in existing companies, the NSF should continue its focus on outreach to ensure a high rate of proposals from firms new to the program.

  1. Increase management funding for SBIR. To enhance program utilization, management, and evaluation (as described above), consideration should be given to the provision of additional program funds. There are three ways by which this might be achieved:

    1. Additional funds might be allocated internally, within the existing NSF budget, with reference to the management funding provided for comparable NSF programs, keeping in mind the special requirements of SBIR applications, solicitations, evaluations, selection, monitoring, reporting, outreach, commercialization services, site visits, and other functions related to the normal and effective operation of the program.

    2. Funds might be drawn from the existing set-aside for the program to carry out these activities.18

    3. The set-aside for the program, currently at 2.5 percent of external research budgets, might be increased, with the goal of providing additional resources to maximize the program’s return to the nation.19


Under current legislation, funds drawn from the SBIR “set-aside” cannot be used for these purposes. They are almost exclusively allocated for awards.


Each of these options has its advantages and disadvantages. For the most part, the departments, institutes, and agencies responsible for the SBIR program have not proved willing or able to make additional management funds available. Without direction from the Congress, they are unlikely to do so. With regard to drawing funds from the program for evaluation and management, current legislation does not permit this and would have to be modified; therefore the Congress has clearly intended program funds to be for awards only. The third option, involving a modest increase to the program, would also require legislative action and would perhaps be more easily achievable in the event of an

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