WASHINGTON, D.C.—The 2012 National Defense Authorization Act (H.R. 1540) adopted by the Senate today included tough new measures to fight waste, fraud, and abuse in the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.  Chairman John D. (Jay) Rockefeller IV authored these measures after a Commerce Committee investigation found evidence that funds awarded through these two technology innovation programs were being misused.    

Chairman Rockefeller’s language, which enjoyed bipartisan support in both the House and the Senate, directs more resources to preventing SBIR fraud and gives federal Inspectors General better enforcement tools.

“Research dollars are scarce and precious.  We simply can’t afford to lose taxpayer dollars to this kind of preventable fraud,” Rockefeller said.  “This strong language puts important new safeguards in place to root out waste, fraud and abuse in the SBIR and STTR programs.  Government-supported research is crucial to our country’s future economic growth, and these changes will help make sure we’re supporting the true innovators who are working to make our country safer and our economy stronger.”

Background:

The SBIR and STTR programs, which H.R 1540 reauthorized for another six years, provide seed money and support for entrepreneurs with innovative technology business plans.  The goal of the program is to help small businesses develop their ideas into marketable products that will attract private capital and help keep the American economy competitive. 

But an investigation led by Chairman Rockefeller in 2009 identified cases where SBIR award recipients defrauded the government.  It uncovered cases where businesses accepted funds for work they never did, or double- and triple-billed the government for the same research.  In one case highlighted in the investigation, a Florida professor misused SBIR funds to purchase a luxury automobile and condominium. 

A letter Rockefeller wrote to National Science Foundation Inspector General Alison Lerner in June provides additional information about the Commerce Committee investigation and other efforts to address waste, fraud, and abuse in the SBIR and STTR programs.

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