WASHINGTON, D.C.—U.S. Senator John D. (Jay) Rockefeller IV (D-W.Va.), Chairman of the U.S. Senate Committee on Commerce, Science, and Transportation, and Senator Olympia Snowe (R-Maine), Ranking Member of the U.S. Senate Committee on Small Business and Entrepreneurship, today responded to the NASA Inspector General’s audit of its Small Business Innovation Research (SBIR) program. The audit found that NASA is wasting more than $2 million a year in SBIR funds because it does not have adequate financial controls in place to safeguard taxpayer dollars.

“Government-supported scientific research and innovation is one of the keys to our country’s future economic growth. We can’t afford to lose any of our precious research and development dollars to waste, fraud or abuse,” Chairman Rockefeller said. “I congratulate the NASA Inspector General for taking a clear, hard look at the way NASA awards, administers and tracks SBIR funds. I urge NASA to quickly implement the Inspector General’s recommendations and put an end to the problems the IG has identified.”

“I commend NASA’s Office of Inspector General for performing this thorough audit, and for recommending substantive suggestions that can help eliminate waste, fraud, and abuse at the agency,” said Senator Snowe. “Today’s report highlights the need for Congress to pass comprehensive legislation reauthorizing the SBIR program and providing agencies with the necessary tools to improve their oversight efforts, which the Senate passed unanimously last month. I look forward to working with my colleagues in the Senate and House to ensure that this legislation passes both chambers.”

KEY BACKGROUND INFORMATION

The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs were created to strengthen the role of the small, innovative firms in federally funded research and development. In 2009, the Senate Commerce Committee conducted an investigation which uncovered the various ways dishonest applicants have been able to defraud these programs, including “duplicative funding,” in which awardees receive multiple payments from different SBIR-awarding agencies for the same project.

Following the investigation, Senators Rockefeller and Snowe added language to the SBIR/STTR Reauthorization Act of 2010 to strengthen the programs’ anti-fraud provisions and fight waste and abuse. The legislation passed the Senate, but did not come up for a vote in the U.S. House of Representatives before the last congressional session ended. Additional information on the legislation can be found here.

The NASA IG audit found that:

• In 25% of its 2008 SBIR awards, NASA made improper payments to award recipients for undocumented and ineligible expenses;

• NASA’s payments for undocumented and ineligible expenses totaled $2.7 million in 2008; 

• Data mining techniques can be applied to existing government databases in order to detect and prevent cases of “duplicative funding” across SBIR agencies. For example, a search of NASA and SBA databases for summaries with “lithium batteries” identified 31 firms with 98 contracts valued at $26.8 million that are potentially duplicative. The reauthorization language Senators Rockefeller and Snowe crafted strengthens the existing databases to make fraud detection easier.

“This audit is especially timely since Congress is in the process of reauthorizing the SBIR and STTR programs,” Chairman Rockefeller said. “While this report focuses on just one federal agency, the Committee’s 2009 investigation found that SBIR and STTR programs administered by other federal agencies are also vulnerable to waste, fraud and abuse. Senator Snowe and I worked hard to include strong anti-fraud language in the SBIR/STTR Reauthorization Act of 2010 because we cannot – and will not – tolerate wasteful government spending. I will fight to pass this legislation as soon as possible in the 112th Congress.”

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