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that SBIR programs are encouraging technological innovations that might not occur otherwise.

Heads of agencies and project officers responsible for SBIR projects reported that SBIR programs help meet their agency research and development needs. SBIR program managers and project officers identified ways in which SBIR programs helped accomplish this, including support of high-risk research and research on technologies with long-range potential. Agencies differ in their efforts to use small business to meet research and development needs. DOD and NASA solicit and fund SBIR projects that meet specific agency research and development objectives, while NSF and His select projects with high potential for private sector commercialization, within broad categories of technological interest to the agency. Other agencies fall between these extremes. These differences in agency emphasis are reflected in proposal solicitation and in research management. In comparison with NSF and HHS, DOD and NASA proposal solicitations are more specific and their projects are more closely monitored.

Because only a small portion of all SBIR projects have completed Phase II,
it is too soon to make a thorough analysis of how well sbir programs are
promoting commercial innovation. But, preliminary analysis, based on
questionnaire responses by firms, indicates that some projects are mov-
ing toward commercialization. Agencies differ in the emphasis they
place on commercial potential in evaluating proposals. NSF, for example,
places heavy emphasis on plans for commercial development that
include follow-on funding commitments by outside parties. Other agen-
cies vary in the emphasis they place on follow-on funding commitments.

The Small Business Administration and agencies with SBIR programs foster and encourage participation by minority and disadvantaged persons through outreach activities to inform them about SBir activities. According to the Small Business Administration, the percentage of money awarded to minority and disadvantaged firms was lower in fiscal years 1986 and 1987 than in the 2 previous fiscal years; however, agency officials believe some inaccuracies may exist in the data on minority firm participation in SBIR.

Quality of SBIR Projects

To compare the quality of SBIR projects with other agency research, GAO sent questionnaires to 530 project officers who monitor SBIR research as well as other projects at the 5 agencies providing 96 percent of all SBIR funding. Overall, respondents assessed 29 percent of the SBIR projects as

being of higher quality than non-SBIR research and indicated that about half of the SBIR projects were similar in overall quality to other research. Project officers at all agencies rated SBIR projects substantially higher than other research under their responsibility regarding the potential for leading to the invention and commercialization of new products, processes, or services, with NSF having the highest level. Agency project officers differed, however, on other factors, such as the likelihood that the project will lead to new scientific and technical discoveries.

Judgments of Department and Agency Heads

The heads of the 11 departments and agencies with SBIR programs reported generally favorable effects on agency research programs. For example, seven agencies identified ways in which SBIR programs help attain their research goals through filling gaps in other agency research programs, expanding in new research directions, and other means.


GAO is not making recommendations in this report.

Agency Comments

GAO asked the 11 agencies that conduct SBIR programs, as well as the Small Business Administration, to comment on a draft of our report. The agencies either had no comment on the report or expressed agreement with its contents.



Table 1.1: Data on SBIR Programs by Fiscal Year, All

Table 2.1: SBIR Proposal Selection Rate, Fiscal Years



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