[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4777 Introduced in House (IH)]

<DOC>






119th CONGRESS
  1st Session
                                H. R. 4777

To improve the SBIR and STTR programs under the Small Business Act, and 
                          for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 25, 2025

Mr. Williams of Texas introduced the following bill; which was referred 
to the Committee on Small Business, and in addition to the Committee on 
    Science, Space, and Technology, for a period to be subsequently 
   determined by the Speaker, in each case for consideration of such 
 provisions as fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
To improve the SBIR and STTR programs under the Small Business Act, and 
                          for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Investing in 
National Next-Generation Opportunities for Venture Acceleration and 
Technological Excellence'' or the ``INNOVATE Act''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
      TITLE I--PROMOTING TRANSITION FOR BATTLE-READY TECHNOLOGIES

Sec. 101. Enhancing small business success in the STTR program.
Sec. 102. Phase II strategic breakthrough funding.
Sec. 103. Implementation briefings.
Sec. 104. Fixed-price contracts.
   TITLE II--ENCOURAGING SMALL BUSINESS INNOVATION IN ALL OF AMERICA

Sec. 201. Encouraging new SBIR and STTR entrants.
Sec. 202. Combating discriminatory practices in the SBIR and STTR 
                            programs.
Sec. 203. Disclosures and prohibitions relating to certain agreements 
                            with entities engaging in censorship.
Sec. 204. Connecting SBIR and STTR awardees and small business 
                            investment companies.
Sec. 205. Agency outreach to rural communities.
  TITLE III--STREAMLINING PARTICIPATION IN THE SBIR AND STTR PROGRAMS

Sec. 301. Amendments relating to open topics.
Sec. 302. Reducing administrative burden.
  TITLE IV--PROTECTING AMERICAN INNOVATION FROM ADVERSARIAL INFLUENCE

Sec. 401. Definition of foreign risk.
Sec. 402. Bolstering research security of SBIR and STTR awards.
Sec. 403. Strengthening the due diligence program to assess security 
                            risks.
Sec. 404. Strengthening agency recovery authority.
Sec. 405. Best practices on investor informational rights.
Sec. 406. GAO report.
                TITLE V--SIMPLIFYING SBIR-STTR STANDARDS

Sec. 501. Improving direct to Phase II authorities.
Sec. 502. Improving SBIR and STTR data collection.
Sec. 503. Streamlining program administration.
Sec. 504. Extending SBIR and STTR authorization.
                        TITLE VI--MISCELLANEOUS

Sec. 601. Technical amendments.
Sec. 602. Repeals.
Sec. 603. Severability.

SEC. 2. DEFINITIONS.

    In this Act, the terms ``Phase I'', ``Phase II'', ``Phase III'', 
``SBIR'', and ``STTR'' have the meanings given those terms in section 
9(e) of the Small Business Act (15 U.S.C. 638(e)).

      TITLE I--PROMOTING TRANSITION FOR BATTLE-READY TECHNOLOGIES

SEC. 101. ENHANCING SMALL BUSINESS SUCCESS IN THE STTR PROGRAM.

    Section 9 of the Small Business Act (15 U.S.C. 638 et seq.) is 
amended--
            (1) in subsection (e)(7)--
                    (A) by striking ``40'' and inserting ``50''; and
                    (B) by striking ``30'' and inserting ``20'';
            (2) in subsection (f)(1)--
                    (A) in subparagraph (H), by striking ``and'' at the 
                end;
                    (B) in subparagraph (I), by striking ``and each 
                fiscal year thereafter,'' and inserting ``; and''; and
                    (C) by adding at the end the following:
                    ``(J) not less than 3.45 percent of such budget in 
                fiscal year 2026 and every year thereafter,''; and
            (3) in subsection (n)(1)(B)--
                    (A) in clause (iv), by striking ``and'' at the end;
                    (B) in clause (v), by striking ``and each fiscal 
                year thereafter.'' and inserting ``; and''; and
                    (C) by adding at the end the following:
                            ``(vi) not less than 0.20 percent for 
                        fiscal year 2026 and each fiscal year 
                        thereafter.''.

SEC. 102. PHASE II STRATEGIC BREAKTHROUGH FUNDING.

    (a) In General.--Section 9 of the Small Business Act (15 U.S.C. 
638) is amended--
            (1) in subsection (aa), by adding at the end the following:
            ``(6) Strategic breakthrough allocation.--Participating 
        agencies with a budget for SBIR greater than $100,000,000 shall 
        not be required to receive a waiver from the Administrator to 
        award a small business concern not more than $30,000,000 when 
        using funds made available under a strategic breakthrough 
        allocation (as defined in subsection (ff)).''; and
            (2) in subsection (ff)--
                    (A) in the subsection heading, by striking ``and 
                STTR'' and inserting ``Phase II'';
                    (B) in paragraph (1), by striking ``or Phase II 
                STTR award''; and
                    (C) by adding at the end the following new 
                paragraph:
            ``(3) Strategic breakthrough awards.--
                    ``(A) Award.--Under this subparagraph, a funding 
                agreement may be awarded to a small business concern by 
                each participating agency using funds made available 
                under a strategic breakthrough allocation, as defined 
                in subparagraph (B).
                    ``(B) Fund parameters.--
                            ``(i) Strategic breakthrough allocation 
                        defined.--In this subparagraph, the term 
                        `strategic breakthrough allocation' means, with 
                        respect to a participating agency with a 
                        required expenditure under subsection (f)(1) in 
                        excess of $100,000,000, a required expenditure 
                        amount from the SBIR allocation under 
                        subsection (f)(1) of such agency of not less 
                        than 0.25 percent of the extramural budget for 
                        research or research and development designated 
                        for such agency for fiscal year 2026 and every 
                        fiscal year thereafter.
                            ``(ii) Requirements.--In the case of a 
                        Phase II agreement that is awarded to a small 
                        business concern by a participating agency 
                        using funds made available under a strategic 
                        breakthrough allocation, the following 
                        requirements shall apply:
                                    ``(I) Award size and period of 
                                performance.--A participating agency 
                                may award from a strategic breakthrough 
                                allocation not more than $30,000,000 in 
                                aggregate to a small business concern, 
                                including its affiliates, spinouts, or 
                                subsidiaries based on reaching 
                                production or development milestone if 
                                the total period of performance of the 
                                project with respect to which such 
                                funds are awarded is not more than 48 
                                months.
                                    ``(II) Small business concern 
                                requirements.--The small business 
                                concern shall--
                                            ``(aa) have been awarded 
                                        not less than 1 prior Phase II 
                                        award under the SBIR or STTR 
                                        program;
                                            ``(bb) demonstrate not less 
                                        than 100 percent matching funds 
                                        from sources other than the 
                                        Government or amounts awarded 
                                        by participating agencies under 
                                        a program other than Phase I 
                                        and II of the SBIR or STTR 
                                        program as a result of an award 
                                        using funds made available 
                                        under a strategic breakthrough 
                                        allocation;
                                            ``(cc) is an effective 
                                        solution, as determined by 
                                        market research; and
                                            ``(dd) only be eligible for 
                                        an award from the strategic 
                                        breakthrough allocation if the 
                                        product, process, or technology 
                                        of the small business concern--

                                                    ``(AA) meets a 
                                                necessary level of 
                                                readiness and has a 
                                                commitment for 
                                                inclusion in a program 
                                                objective memorandum 
                                                from an official with 
                                                the rank of program 
                                                executive officer or 
                                                higher in an 
                                                acquisition 
                                                organization of the 
                                                participating agency 
                                                making such award; and

                                                    ``(BB) will meet 
                                                high priority 
                                                requirements or 
                                                operational needs of 
                                                such participating 
                                                agency through a 
                                                successful transition 
                                                and into the 
                                                acquisition process.

                                    ``(III) Deadline.--Each 
                                participating agency shall complete any 
                                contract awards using strategic 
                                breakthrough allocation funds not later 
                                than 90 days after receiving a proposal 
                                from a small business concern for the 
                                award.
                                    ``(IV) Eligible activities.--
                                Eligible activities by a small business 
                                concern using strategic breakthrough 
                                allocation funds are--
                                            ``(aa) design for 
                                        manufacturing;
                                            ``(bb) establishing 
                                        manufacturing facilities, 
                                        tooling, and supply chain 
                                        capacity;
                                            ``(cc) buying raw materials 
                                        or inventory;
                                            ``(dd) the integration of 
                                        products with open 
                                        interoperability standards;
                                            ``(ee) testing, evaluation, 
                                        and certification of low-rate 
                                        production units; and
                                            ``(ff) the purchase of 
                                        production units and 
                                        maintenance.
                                    ``(V) Selection criteria.--In 
                                making awards using funds made 
                                available under a strategic 
                                breakthrough allocation, a 
                                participating agency shall consider--
                                            ``(aa) the potential of the 
                                        small business concern to--

                                                    ``(AA) advance the 
                                                national security 
                                                capabilities of the 
                                                United States; and

                                                    ``(BB) provide new 
                                                technologies or 
                                                processes, or new 
                                                applications of 
                                                existing technologies, 
                                                that will enable new 
                                                alternatives to 
                                                existing programs;

                                            ``(bb) whether a customer 
                                        in the participating agency has 
                                        expressed an intent to purchase 
                                        and integrate technology from 
                                        the small business concern into 
                                        its operations; and
                                            ``(cc) whether a particular 
                                        technology area is 
                                        undercapitalized by private 
                                        investment.
                    ``(C) Acquisition mechanism.--A participating 
                agency shall establish a mechanism to provide small 
                business concerns with direct access to program and 
                requirements offices throughout the participating 
                agency that may purchase technology from small business 
                concerns under Phase III of the SBIR program.
                    ``(D) Use of streamlined contracting mechanisms.--
                Each participating agency shall implement streamlined 
                processes and requirements for submitting proposals and 
                applying for awards using funds made available under a 
                strategic breakthrough allocation.''.
    (b) Commercialization Readiness Program.--Section 9(y) of the Small 
Business Act (15 U.S.C. 638(y)) is amended--
            (1) in paragraph (2)--
                    (A) by striking ``shall identify'' and inserting 
                the following: ``shall--
                    ``(A) identify'';
                    (B) in subparagraph (A), as so designated--
                            (i) by inserting ``, including small 
                        business concerns with an award from the 
                        strategic breakthrough allocation,'' before 
                        ``that have the potential''; and
                            (ii) by striking the period at the end and 
                        inserting a semicolon; and
                    (C) by adding at the end the following:
                    ``(B) ensure, in collaboration with SBIR program 
                managers of each component, that research programs 
                identified under subparagraph (A) are analyzed within 
                the programming and budgeting process as budget 
                requests are developed; and
                    ``(C) provide to the Committee on Small Business 
                and Entrepreneurship of the Senate and the Committees 
                on Small Business and Science, Space, and Technology of 
                the House of Representatives information on the 
                integration of SBIR and STTR awardees in budget 
                rollouts for research, development, testing, and 
                evaluation activities.'';
            (2) by striking paragraph (3) and redesignating paragraphs 
        (4), (5), and (6) as paragraphs (3), (4), and (5), 
        respectively; and
            (3) in paragraph (5), as so redesignated--
                    (A) in the subparagraph heading, by striking ``and 
                sttr'';
                    (B) in subparagraph (A)--
                            (i) by inserting ``substantively'' before 
                        ``increase'';
                            (ii) by striking ``and the number of Phase 
                        II STTR contracts''; and
                            (iii) by inserting ``in fiscal year 2028 as 
                        compared to fiscal year 2025'' before the 
                        semicolon at the end;
                    (C) in subparagraph (B), by striking ``and'' at the 
                end;
                    (D) by redesignating subparagraph (C) as 
                subparagraph (E);
                    (E) by inserting after subparagraph (B) the 
                following:
                    ``(C) establish a mechanism to provide small 
                business concerns with direct access to program and 
                requirements offices that may purchase technology from 
                the small business concern under Phase III of the SBIR 
                program;
                    ``(D) allow services to provide operational needs 
                statements directly to chiefs of requirements offices; 
                and''; and
                    (F) in subparagraph (E), as so redesignated, in 
                clause (i) by striking ``and STTR contracts''.

SEC. 103. IMPLEMENTATION BRIEFINGS.

    Not later than 60 days after the date of enactment of this Act, and 
on a recurrent basis until the implementation of paragraph (3) of 
section 9(ff) of the Small Business Act (15 U.S.C. 638(ff)), as added 
by section 102, is complete, the head of each agency participating in 
the SBIR or STTR programs that made an award from funds made available 
under a strategic breakthrough allocation (as defined under paragraph 
(3)(B) of section 9(ff) of the Small Business Act (15 U.S.C. 638(ff), 
as added by section 102)) shall brief the Committee on Small Business 
and Entrepreneurship of the Senate and the Committees on Small Business 
and on Science, Space, and Technology of the House of Representatives 
on such implementation.

SEC. 104. FIXED-PRICE CONTRACTS.

    Section 9 of the Small Business Act (15 U.S.C. 638) is amended--
            (1) in subsection (f), by adding at the end the following:
            ``(5) Fixed-price contract.--Any funding agreement that is 
        a contract made with expenditures allocated to the SBIR program 
        under paragraph (1) shall be a firm fixed-price contract (as 
        defined in section 16.202 of the Federal Acquisition 
        Regulation), unless, on a case-by-case basis, the head of the 
        awarding Federal agency makes a written determination to use a 
        different contract structure.''; and
            (2) in subsection (n), by adding at the end the following:
            ``(5) Fixed-price contract.--Any funding agreement that is 
        a contract made with expenditures allocated to the STTR program 
        under paragraph (1) shall be a firm fixed-price contract (as 
        defined in section 16.202 of the Federal Acquisition 
        Regulation), unless the head of the awarding Federal agency 
        makes a written determination to use a different contract 
        structure.''.

   TITLE II--ENCOURAGING SMALL BUSINESS INNOVATION IN ALL OF AMERICA

SEC. 201. ENCOURAGING NEW SBIR AND STTR ENTRANTS.

    (a) Encouraging New SBIR and STTR Entrants.--Section 9(jj) of the 
Small Business Act (15 U.S.C. 638(jj)) is amended to read as follows:
    ``(jj) Encouraging New SBIR and STTR Entrants.--
            ``(1) Optimizing sbir and sttr funding.--
                    ``(A) In general.--The head of a participating 
                agency may award a Phase I or Phase II award to a small 
                business concern only if the total value of the Phase I 
                and Phase II awards awarded to such small business 
                concern, including its affiliates, spinouts, and 
                subsidiaries, does not exceed $75,000,000.
                    ``(B) Waiver.--
                            ``(i) In general.--On an award-by-award 
                        basis, the Undersecretary or Director 
                        overseeing the SBIR or STTR program of a 
                        Federal agency may waive the requirement under 
                        subparagraph (A) with a written justification 
                        by the Undersecretary or Director that explains 
                        why the use of the waiver authority for an 
                        otherwise disqualified small business concern 
                        is imperative for national security purposes 
                        and why the work cannot be performed by other 
                        qualifying small business concerns.
                            ``(ii) Nondelegation.--The waiver authority 
                        established under clause (i) may not be 
                        delegated.
                            ``(iii) Record requirement.--Participating 
                        agencies shall maintain information on any 
                        awards made using the waiver established under 
                        clause (i), including the amount of the award, 
                        the written justification for each award, and 
                        the identity of the award recipient.
                            ``(iv) Report.--The Administrator shall 
                        include the information described in clause 
                        (iii) in the annual report of the Administrator 
                        to Congress required by subsection (b)(7).
            ``(2) Principal investigators.--An individual may not 
        concurrently serve as the principal investigator on more than 1 
        proposal to a single Phase I solicitation or a single Phase II 
        solicitation.
            ``(3) Phase i size standard.--A small business concern 
        applying for a Phase I award may not have annual receipts (as 
        defined in section 121.104 of title 13, Code of Federal 
        Regulations, or any successor regulation) of more than 
        $40,000,000 for the most recent fiscal year.''.
    (b) Phase 1A Program.--
            (1) In general.--Section 9 of the Small Business Act (15 
        U.S.C. 638) is amended--
                    (A) in subsection (e)--
                            (i) in paragraph (4)--
                                    (I) in subparagraph (A), by 
                                striking ``subparagraph (B)'' and 
                                inserting ``subparagraph (C)'';
                                    (II) by redesignating subparagraphs 
                                (B) and (C) as subparagraphs (C) and 
                                (D); and
                                    (III) by inserting after 
                                subparagraph (A), the following:
                    ``(B) a 1A phase for the same purposes as the first 
                phase described under subparagraph (A) and intended to 
                increase accessibility to the program for new entrants 
                with proposals submitted pursuant to only SBIR open 
                topic announcements;''; and
                            (ii) by adding at the end following:
            ``(20) the term `Phase 1A' means the phase described in 
        paragraph (4)(B);''; and
                    (B) by amending subsection (pp) to read as follows:
    ``(pp) Phase 1A Awards.--
            ``(1) Sense of congress.--It is the sense of Congress 
        that--
                    ``(A) Phase 1A funds will bring thousands of new 
                small business concerns committed to commercialization 
                of critical technologies into the SBIR program; and
                    ``(B) in order for participating agencies to 
                benefit from the full scope of American innovation and 
                identify the most promising solutions to scale, Phase 
                1A awards should fund the strongest technologies in a 
                topic area regardless of--
                            ``(i) the location of the small business 
                        concern within the United States; or
                            ``(ii) the educational background of the 
                        principal investigator.
            ``(2) Authorization.--The head of each agency with an SBIR 
        program shall allocate not less than 1.5 percent of funding and 
        not more than 3 percent of funding for the SBIR program of the 
        agency to Phase 1A awards.
            ``(3) Solicitation.--A solicitation issued under this 
        subsection shall be conducted as an open topic announcement.
            ``(4) Eligibility.--A small business concern, including its 
        affiliates, spinouts, or subsidiaries, is eligible for an award 
        under this subsection only if such small business concern, 
        including its affiliates, spinouts, or subsidiaries, has not 
        previously received an SBIR or STTR award.
            ``(5) Proposal.--
                    ``(A) In general.--A proposal submitted in response 
                to a solicitation under this subsection shall consist 
                of a report that is not more than 5 pages in length and 
                containing the criteria in clauses (i) through (iv) of 
                subparagraph (B).
                    ``(B) Criteria.--
                            ``(i) Identification of program.--The small 
                        business concern shall describe the problem 
                        that the proposal is intended to address for 
                        the awarding agency and any commercial 
                        customer.
                            ``(ii) Description of solution.--The small 
                        business concern shall describe the proposed 
                        solution, including the technical basis for the 
                        solution to demonstrate how the solution would 
                        address the problem described in the proposal, 
                        including the level of maturity of the solution 
                        at the time of the proposal.
                            ``(iii) Effects of the solution.--The small 
                        business concern shall describe how adoption of 
                        the proposed solution would produce potential 
                        time savings, cost savings, risk reduction, 
                        improvement of mission outcomes, or any other 
                        beneficial effects for the awarding agency and 
                        any commercial customer.
                            ``(iv) Differentiation.--The small business 
                        concern shall--
                                    ``(I) identify the state of 
                                solutions in use at the time of the 
                                proposal to address the problem 
                                described in the proposal; and
                                    ``(II) explain how the proposed 
                                solution is a unique and novel 
                                solution.
                            ``(v) Commercialization strategy.--The 
                        small business concern shall--
                                    ``(I) describe how the small 
                                business concern intends to fund the 
                                proposed solution from sources other 
                                than the award; and
                                    ``(II) explain the market for the 
                                proposed solution, including the 
                                intended Government and commercial end 
                                users.
            ``(6) Award limits.--
                    ``(A) Number of awards.--A small business concern 
                or principal investigator is eligible for not more than 
                one Phase 1A award.
                    ``(B) Amount.--An award made under this subsection 
                shall be for not more than $40,000.
            ``(7) Notification of selection or non-selection.--Each 
        agency shall notify each small business concern of the award 
        decision of the agency on any proposal submitted by the small 
        business concern not later than 90 days after the date on which 
        the solicitation closes.
            ``(8) Application for phase ii award.--
                    ``(A) Eligibility.--A small business concern that 
                receives a Phase 1A award shall be eligible to apply 
                for a Phase II award.
                    ``(B) Use of funds.--A small business concern may 
                use funds from a Phase 1A award to develop a proposed 
                solution in pursuit of a subsequent proposal for a 
                Phase I award or a Phase II award.
            ``(9) Streamlined awards.--The head of each participating 
        agency shall implement streamlined processes and requirements 
        for submitting proposals and applying for solicitations for 
        Phase 1A awards.
            ``(10) Peer review requirement.--The head of a 
        participating agency may waive any applicable peer review 
        requirements for Phase 1A awards.''.
            (2) Conforming amendments.--Section 9(e) of the Small 
        Business Act (15 U.S.C. 638(e)) is amended--
                    (A) in paragraph (12)(A), by striking ``paragraph 
                (4)(B)'' and inserting ``paragraph (4)(C)''; and
                    (B) in paragraph (13)(A), by striking ``paragraph 
                (4)(C)'' and inserting ``paragraph (4)(D)''.

SEC. 202. COMBATING DISCRIMINATORY PRACTICES IN THE SBIR AND STTR 
              PROGRAMS.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended by 
this Act, is amended--
            (1) in subsection (b)(7)(C), by striking ``owned and 
        controlled by women or by socially or economically 
        disadvantaged individuals'' and inserting ``owned by 
        individuals who reside in rural areas'';
            (2) in subsection (e)--
                    (A) in paragraph (18), by striking ``and'' at the 
                end;
                    (B) in paragraph (19), by striking the period at 
                the end and inserting a semicolon; and
                    (C) by adding at the end the following:
            ``(21) the term `new entrants' means a small business 
        concern that has not received an SBIR or STTR award;
            ``(22) the term `rural area' means a county or other 
        political subdivision of a State that the Bureau of the Census 
        has defined as mostly rural or completely rural in the most 
        recent decennial census;'';
            (3) in subsection (g)(8)(A)--
                    (A) by striking clause (iii);
                    (B) by redesignating clauses (iv), (v), and (vi) as 
                clauses (iii), (iv), and (v), respectively; and
                    (C) in clause (iii), as so redesignated, by 
                striking ``a socially or economically disadvantaged 
                individual or has a socially or economically 
                disadvantaged individual'' and inserting ``an 
                individual who resides in a rural area or has an 
                individual who resides in a rural area or is a new 
                entrant'';
            (4) in subsection (j)--
                    (A) by adjusting the margins for paragraphs (2) and 
                (3) 2 ems to the left; and
                    (B) in paragraph (2)--
                            (i) by striking subparagraph (F);
                            (ii) by redesignating subparagraphs (G), 
                        (H), and (I) as subparagraphs (F), (G), and 
                        (H), respectively; and
                            (iii) in subparagraph (H), as so 
                        redesignated, by striking ``subparagraph (H)'' 
                        and inserting ``subparagraph (G)'';
            (5) in subsection (k)(1)(F)--
                    (A) by striking clause (ii);
                    (B) by redesignating clauses (iii), (iv), and (v) 
                as clauses (ii), (iii), and (iv), respectively; and
                    (C) in clause (ii), as so redesignated, by striking 
                ``a socially or economically disadvantaged individual 
                or has a socially or economically disadvantaged 
                individual'' and inserting ``an individual who resides 
                in a rural area or has an individual who resides in a 
                rural area or is a new entrant'';
            (6) in subsection (o)(9)(A)--
                    (A) by striking clause (iii);
                    (B) by redesignating clauses (iv), (v), and (vi) as 
                clauses (iii), (iv), and (v), respectively; and
                    (C) in clause (iii), as so redesignated, by 
                striking ``a socially or economically disadvantaged 
                individual or has a socially or economically 
                disadvantaged individual'' and inserting ``an 
                individual who resides in a rural area or has an 
                individual who resides in a rural area or is a new 
                entrant''; and
            (7) in subsection (mm)--
                    (A) in paragraph (1)--
                            (i) in the matter preceding subparagraph 
                        (A), by striking ``and until September 30, 
                        2025''; and
                            (ii) in subparagraph (F), by striking ``or 
                        abuse to ensure compliance'' and inserting 
                        ``abuse, or adversarial influence to ensure 
                        compliance'';
                    (B) in paragraph (2)(A), by striking ``to carry out 
                the policy directive required under subsection 
                (j)(2)(F) and'' and inserting ``to increase the 
                participation of States with respect to which a low 
                level of SBIR awards have historically been awarded''; 
                and
                    (C) by adding at the end the following:
            ``(7) Eligibility.--An agency may use the funds allocated 
        to the SBIR program of such agency under this subsection only 
        if such agency does not--
                    ``(A) consider the race, gender, or ethnicity of 
                the principal investigator, founder, or key personnel 
                of the small business concern applying for an SBIR or 
                STTR award in an award decision under the SBIR or STTR 
                program of the agency;
                    ``(B) require or consider a statement or plan to 
                promote diversity or equity as part of an application 
                for an SBIR or STTR award under the SBIR or STTR 
                program of the agency; or
                    ``(C) offer supplemental funds to a recipient of an 
                SBIR or STTR award based on the race, gender, or 
                ethnicity of the principal investigator, founder, or 
                key personnel of a small business concern.''.

SEC. 203. DISCLOSURES AND PROHIBITIONS RELATING TO CERTAIN AGREEMENTS 
              WITH ENTITIES ENGAGING IN CENSORSHIP.

    (a) Disclosure for SBIR Applicants.--Section 9(g)(13) of the Small 
Business Act (15 U.S.C. 638(g)(13)) is amended--
            (1) in subparagraph (F), by striking ``and'' at the end;
            (2) in subparagraph (G), by striking the semicolon at the 
        end and inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(H) a current or pending agreement with--
                            ``(i) NewsGuard Technologies, Inc. (doing 
                        business as `NEWSGuard');
                            ``(ii) Disinformation Index, Inc., 
                        Disinformation Index, Ltd., or Global 
                        Disinformation Index gUG (collectively doing 
                        business as `Global Disinformation Index');
                            ``(iii) Internews; or
                            ``(iv) an entity that engages in operations 
                        or activities, or produces products, the 
                        function of which is to demonetize or rate the 
                        credibility of a domestic entity (including 
                        news and information outlets) based on lawful 
                        speech of such domestic entity under the stated 
                        function of `fact-checking' or otherwise 
                        exposing or correcting misinformation, 
                        disinformation, or misinformation;''.
    (b) Prohibition on SBIR Awards.--Paragraph (16) of section 9(g) of 
the Small Business Act (15 U.S.C. 638(g)), as redesignated by section 
402, is amended by adding at the end the following:
                    ``(G) the small business concern submitting the 
                proposal or application has a current or pending 
                agreement with--
                            ``(i) NewsGuard Technologies, Inc. (doing 
                        business as `NEWSGuard');
                            ``(ii) Disinformation Index, Inc., 
                        Disinformation Index, Ltd., or Global 
                        Disinformation Index gUG (collectively doing 
                        business as `Global Disinformation Index');
                            ``(iii) Internews; or
                            ``(iv) an entity that engages in operations 
                        or activities, or produces products, the 
                        function of which is to demonetize or rate the 
                        credibility of a domestic entity (including 
                        news and information outlets) based on lawful 
                        speech of such domestic entity under the stated 
                        function of `fact-checking' or otherwise 
                        exposing or correcting misinformation, 
                        disinformation, or misinformation;''.
    (c) Disclosure for STTR Applicants.--Section 9(o)(17) of the Small 
Business Act (15 U.S.C. 638(o)(17)) is amended--
            (1) in subparagraph (F), by striking ``and'' at the end;
            (2) in subparagraph (G), by striking the semicolon at the 
        end and inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(H) a current or pending agreement with--
                            ``(i) NewsGuard Technologies, Inc. (doing 
                        business as `NEWSGuard');
                            ``(ii) Disinformation Index, Inc., 
                        Disinformation Index, Ltd., or Global 
                        Disinformation Index gUG (collectively doing 
                        business as `Global Disinformation Index');
                            ``(iii) Internews; or
                            ``(iv) an entity that engages in operations 
                        or activities, or produces products, the 
                        function of which is to demonetize or rate the 
                        credibility of a domestic entity (including 
                        news and information outlets) based on lawful 
                        speech of such domestic entity under the stated 
                        function of `fact-checking' or otherwise 
                        exposing or correcting misinformation, 
                        disinformation, or misinformation;''.
    (d) Prohibition on STTR Awards.--Paragraph (20) of section 9(o) of 
the Small Business Act (15 U.S.C. 638(o)(20)), as redesignated by 
section 402, is amended by adding at the end the following:
                    ``(G) the small business concern submitting the 
                proposal or application has a current or pending 
                agreement with--
                            ``(i) NewsGuard Technologies, Inc. (doing 
                        business as `NEWSGuard');
                            ``(ii) Disinformation Index, Inc., 
                        Disinformation Index, Ltd., or Global 
                        Disinformation Index gUG (collectively doing 
                        business as `Global Disinformation Index');
                            ``(iii) Internews; or
                            ``(iv) an entity that engages in operations 
                        or activities, or produces products, the 
                        function of which is to demonetize or rate the 
                        credibility of a domestic entity (including 
                        news and information outlets) based on lawful 
                        speech of such domestic entity under the stated 
                        function of `fact-checking' or otherwise 
                        exposing or correcting misinformation, 
                        disinformation, or misinformation;''.
    (e) Conforming Amendments.--
            (1) SBIR awards.--Paragraph (19)(A) of section 9(g) of the 
        Small Business Act (15 U.S.C. 638(g)), as so redesignated by 
        section 402, is amended by striking ``through (G)'' and 
        inserting ``through (H)''.
            (2) STTR awards.--Paragraph (23)(A) of section 9(o) of the 
        Small Business Act (15 U.S.C. 638(o)), as so redesignated by 
        section 402, is amended by striking ``through (G)'' and 
        inserting ``through (H)''.

SEC. 204. CONNECTING SBIR AND STTR AWARDEES AND SMALL BUSINESS 
              INVESTMENT COMPANIES.

    Section 9(mm)(1) of the Small Business Act (15 U.S.C. 638(mm)(1)) 
is amended--
            (1) in subparagraph (J), by striking ``and'' at the end;
            (2) in subparagraph (K), by striking the period at the end 
        and inserting ``; and''; and
            (3) by adding at the end the following new subparagraph:
                    ``(L) connecting SBIR and STTR awardees with small 
                business investment companies (as defined under section 
                103 of the Small Business Investment Act of 1958 (15 
                U.S.C. 662)) and other domestic private investors.''.

SEC. 205. AGENCY OUTREACH TO RURAL COMMUNITIES.

    (a) Agency Outreach.--Section 9 of the Small Business Act (15 
U.S.C. 638) is amended--
            (1) in subsection (j), by adding at the end the following 
        new paragraphs:
            ``(5) Modification relating to rural outreach.--Not later 
        than 90 days after the date of the enactment of this paragraph, 
        the Administrator shall modify the policy directives issued 
        pursuant to this subsection to require each Federal agency 
        participating in the SBIR program to enhance the outreach 
        efforts of such Federal agency to rural communities to increase 
        the participation of small businesses concerns located in rural 
        communities in the SBIR program, including by ensuring that 
        such Federal agency--
                    ``(A) conducts outreach efforts with respect to the 
                SBIR program in rural communities; and
                    ``(B) when such Federal agency conducts such 
                outreach in an area served by a small business 
                development center, coordinates with such small 
                business development center.
            ``(6) Modification relating to rural outreach.--Not later 
        than 90 days after the date of the enactment of this paragraph, 
        the Administrator shall modify the policy directives issued 
        pursuant to this subsection to require the Administration to 
        place a special emphasis on small business concerns in rural 
        areas when conducting outreach related to the SBIR program, 
        including by ensuring that the Administration includes outreach 
        efforts in rural communities carried out by the Administration 
        with respect to the SBIR program.''; and
            (2) in subsection (p), by adding at the end the following 
        new paragraph:
            ``(4) Modification relating to rural outreach.--Not later 
        than 90 days after the date of the enactment of this paragraph, 
        the Administrator shall modify the policy directive issued 
        pursuant to this subsection to require each Federal agency 
        participating in the STTR program to enhance the outreach 
        efforts of such Federal agency to rural communities to increase 
        the participation of small businesses concerns located in rural 
        communities in the STTR program, including by ensuring that 
        such Federal agency--
                    ``(A) conducts outreach efforts with respect to the 
                STTR program in rural communities; and
                    ``(B) when such Federal agency conducts such 
                outreach in an area served by a small business 
                development center, coordinates with such small 
                business development center.
            ``(5) Modification relating to rural outreach.--Not later 
        than 90 days after the date of the enactment of this paragraph, 
        the Administrator shall modify the policy directive issued 
        pursuant to this subsection to require the Administration to 
        place a special emphasis on small business concerns in rural 
        areas when conducting outreach related to the STTR program, 
        including by ensuring that the Administration includes outreach 
        efforts in rural communities carried out by the Administration 
        with respect to the STTR program.''.
    (b) Modification of Current Directives.--Section 9(j)(2) of the 
Small Business Act (15 U.S.C. 638(j)(2)), as amended by section 
202(4)(B), is amended by revising subparagraph (F) to read as follows:
                    ``(F) enhanced outreach efforts to increase the 
                participation of small business concerns that have 
                never participated in Federal research and development 
                to develop innovative technologies, with a special 
                emphasis on small business concerns in rural areas;''.

  TITLE III--STREAMLINING PARTICIPATION IN THE SBIR AND STTR PROGRAMS

SEC. 301. AMENDMENTS RELATING TO OPEN TOPICS.

    (a) Definition of Open Topic Announcement.--Section 9(e) of the 
Small Business Act (15 U.S.C. 638(e)), as amended by section 202(2), is 
further amended by adding at the end the following:
            ``(23) the term `open topic announcement' means a 
        solicitation for SBIR or STTR proposals that--
                    ``(A) is a generalized problem statement or broad 
                technology area and does not contain any language 
                requiring that the solutions that a small business 
                concern proposes adhere to specific technological 
                specifications; and
                    ``(B) evaluates the ability of the solution 
                proposed by the small business concern to meet the 
                stated innovation need of the agency or Government end 
                user; and''.
    (b) Program on Innovation Open Topics.--Section 9(ww) of the Small 
Business Act (15 U.S.C. 638) is amended--
            (1) in paragraph (1)--
                    (A) in the matter preceding subparagraph (A), by 
                striking ``Secretary of Defense'' and inserting ``head 
                of each participating agency''; and
                    (B) by striking ``the Department of Defense'' each 
                place it appears and inserting ``such participating 
                agency'';
            (2) in paragraph (2)--
                    (A) by striking ``Secretary of Defense'' and 
                inserting ``head of each participating agency'';
                    (B) by striking ``each component of'' and inserting 
                ``such participating agency and, with respect to''; and
                    (C) by inserting ``, each component thereof,'' 
                before ``per fiscal year''; and
            (3) by striking paragraph (3).

SEC. 302. REDUCING ADMINISTRATIVE BURDEN.

    Section 9(jj) of the Small Business Act (15 U.S.C. 638(jj)), as 
amended by section 201(a)(1), is further amended by adding at the end 
the following:
            ``(4) Reducing administrative burden.--
                    ``(A) Limit on submissions to a solicitation.--A 
                small business concern, including its affiliates, 
                spinouts, or subsidiaries, may not submit more than 10 
                proposals to a single Phase I solicitation or a single 
                Phase II solicitation under subsection (cc).
                    ``(B) Limit on submissions in a single year.--A 
                small business concern, including its affiliates, 
                spinouts, or subsidiaries, may not submit more than a 
                combined total of 25 proposals to Phase I solicitations 
                or Phase II solicitations under subsection (cc) 
                published by a single agency, including the components 
                of the agency, in a single fiscal year.''.

  TITLE IV--PROTECTING AMERICAN INNOVATION FROM ADVERSARIAL INFLUENCE

SEC. 401. DEFINITION OF FOREIGN RISK.

    Section 9(e) of the Small Business Act (15 U.S.C. 638(e)), as 
amended by section 301, is further amended by adding at the end the 
following:
            ``(24) the term `foreign risk' means, in the past 10 years, 
        any foreign affiliation, technology licensing agreement, joint 
        venture, contractual or financial obligation (pending or 
        otherwise), investment agreement, research relationship 
        (including co-authorship), or business relationship between--
                    ``(A) a small business concern (including all 
                subsidiaries, spinouts, and affiliates) submitting a 
                proposal for an SBIR or STTR program, and covered 
                individuals, owners, or other key personnel of the 
                small business concern; and
                    ``(B) an individual, research institution, business 
                entity, government, or government-owned entity in a 
                foreign country of concern that is disclosed, as 
                required under subsection (g) or subsection (o), or 
                otherwise identified in the due diligence process, as 
                required under subsection (vv).''.

SEC. 402. BOLSTERING RESEARCH SECURITY OF SBIR AND STTR AWARDS.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended by 
this Act, is amended--
            (1) in subsection (g)--
                    (A) by redesignating paragraphs (15), (16), and 
                (17) as paragraphs (16), (18), and (19), respectively;
                    (B) by inserting after paragraph (14) the 
                following:
            ``(15) evaluate whether a small business concern presents a 
        risk to national security for any reason, through measures 
        including--
                    ``(A) the due diligence process required under 
                subsection (vv);
                    ``(B) disclosures submitted under this subsection; 
                or
                    ``(C) coordination with the Inspector General of 
                the agency or the intelligence community (as defined 
                under section 3 of the National Security Act of 1947 
                (50 U.S.C. 3003));'';
                    (C) in paragraph (16), as so redesignated--
                            (i) by striking subparagraph (B);
                            (ii) by striking ``that--'' and all that 
                        follows through ``the small business concern 
                        submitting'' and inserting ``that the small 
                        business concern submitting'';
                            (iii) by redesignating clauses (i), (ii), 
                        and (iii) as subparagraphs (A), (B), and (C), 
                        respectively, and adjusting the margins 
                        accordingly;
                            (iv) in subparagraph (B), as so 
                        redesignated, by striking ``or'' at the end;
                            (v) in subparagraph (C), as so 
                        redesignated, by striking ``and'' at the end; 
                        and
                            (vi) by adding at the end the following:
                    ``(D) has a foreign risk connecting the small 
                business concern to an entity, including any 
                affiliates, spinouts, or subsidiaries of the entity, or 
                individual on one or more of the following lists:
                            ``(i) the UFLPA Entity List maintained by 
                        the Department of Homeland Security;
                            ``(ii) the Non-SDN Chinese Military-
                        Industrial Complex Companies List of the Office 
                        of Foreign Assets Control maintained by the 
                        Department of the Treasury;
                            ``(iii) the Section 889 Prohibition List 
                        established under section 889 of the John S. 
                        McCain National Defense Authorization Act for 
                        Fiscal Year 2019 (Public Law 115-232) and 
                        maintained by the Department of Defense;
                            ``(iv) the list of Chinese Military 
                        companies required under section 1260H of the 
                        William M. (Mac) Thornberry National Defense 
                        Authorization Act for Fiscal Year 2021 (Public 
                        Law 116-283) and maintained by the Department 
                        of Defense;
                            ``(v) the Military End User List maintained 
                        by the Bureau of Industry and Security of the 
                        Department of Commerce;
                            ``(vi) the Entity List maintained by the 
                        Bureau of Industry and Security of the 
                        Department of Commerce;
                            ``(vii) the List of Equipment and Services 
                        maintained by the Federal Communications 
                        Commission; and
                            ``(viii) the Withhold Release Orders and 
                        Findings List maintained by U.S. Customs and 
                        Border Protection;
                    ``(E) has a foreign risk with a primary source that 
                is classified;
                    ``(F) has a foreign risk or another national 
                security risk not listed in statute or regulatory 
                guidance that an agency determines warrants a denial; 
                or'';
                    (D) by inserting after paragraph (16), as so 
                redesignated, the following:
            ``(17) not, and any personnel of the Federal agency 
        including technical points of contact shall not, communicate to 
        an applicant prior to formal notification of an award decision 
        that an application was denied due to a foreign risk;''; and
                    (E) in paragraph (19), as so redesignated--
                            (i) in subparagraph (B), by striking 
                        ``paragraph (16)(A)'' and inserting ``paragraph 
                        (18)(A)''; and
                            (ii) in subparagraph (C), by striking 
                        ``paragraph (16)(B)'' and inserting ``paragraph 
                        (18)(B)''; and
            (2) in subsection (o)--
                    (A) by redesignating paragraphs (19), (20), and 
                (21) as paragraphs (20), (22), and (23), respectively;
                    (B) by inserting after paragraph (18) the 
                following:
            ``(19) evaluate whether a small business concern presents a 
        risk to national security for any reason, through measures 
        including--
                    ``(A) the due diligence process required under 
                subsection (vv);
                    ``(B) disclosures submitted under this subsection; 
                or
                    ``(C) coordination with the Inspector General of 
                the agency or the intelligence community (as defined 
                under section 3 of the National Security Act of 1947 
                (50 U.S.C. 3003));'';
                    (C) in paragraph (20), as so redesignated--
                            (i) by striking subparagraph (B);
                            (ii) by striking ``that--'' and all that 
                        follows through ``the small business concern 
                        submitting'' and inserting ``that the small 
                        business concern submitting'';
                            (iii) by redesignating clauses (i), (ii), 
                        and (iii) as subparagraphs (A), (B), and (C), 
                        respectively, and adjusting the margins 
                        accordingly;
                            (iv) in subparagraph (B), as so 
                        redesignated, by striking ``or'' at the end;
                            (v) in subparagraph (C), as so 
                        redesignated, by striking ``and'' at the end; 
                        and
                            (vi) by adding at the end the following:
                    ``(D) has a foreign risk connecting the small 
                business concern to an entity, including any 
                affiliates, spinouts, or subsidiaries of the entity, or 
                individual on one or more of the following lists:
                            ``(i) the UFLPA Entity List maintained by 
                        the Department of Homeland Security;
                            ``(ii) the Non-SDN Chinese Military-
                        Industrial Complex Companies List of the Office 
                        of Foreign Assets Control maintained by the 
                        Department of the Treasury;
                            ``(iii) the Section 889 Prohibition List 
                        established under section 889 of the John S. 
                        McCain National Defense Authorization Act for 
                        Fiscal Year 2019 (Public Law 115-232) and 
                        maintained by the Department of Defense;
                            ``(iv) the list of Chinese Military 
                        companies required under section 1260H of the 
                        William M. (Mac) Thornberry National Defense 
                        Authorization Act for Fiscal Year 2021 (Public 
                        Law 116-283) and maintained by the Department 
                        of Defense;
                            ``(v) the Military End User List maintained 
                        by the Bureau of Industry and Security of the 
                        Department of Commerce;
                            ``(vi) the Entity List maintained by the 
                        Bureau of Industry and Security of the 
                        Department of Commerce;
                            ``(vii) the List of Equipment and Services 
                        maintained by the Federal Communications 
                        Commission; and
                            ``(viii) the Withhold Release Orders and 
                        Findings List maintained by U.S. Customs and 
                        Border Protection;
                    ``(E) has a foreign risk with a primary source that 
                is classified;
                    ``(F) has a foreign risk or another national 
                security risk not listed in statute or regulatory 
                guidance that an agency determines warrants a denial; 
                or'';
                    (D) by inserting after paragraph (20) the 
                following:
            ``(21) not, and any personnel of the Federal agency 
        including technical points of contact shall not, communicate to 
        an applicant prior to formal notification of an award decision 
        that an application was denied due to a foreign risk;''; and
                    (E) in paragraph (23), as so redesignated--
                            (i) in subparagraph (B), by striking 
                        ``paragraph (20)(A)'' and inserting ``paragraph 
                        (22)(A)''; and
                            (ii) in subparagraph (C), by striking 
                        ``paragraph (20)(B)'' and inserting ``paragraph 
                        (22)(B)''.

SEC. 403. STRENGTHENING THE DUE DILIGENCE PROGRAM TO ASSESS SECURITY 
              RISKS.

    Section 9(vv)(2) of the Small Business Act (15 U.S.C. 638(vv)(2)) 
is amended--
            (1) in subparagraph (B), by striking the period at the end 
        and inserting ``; and''; and
            (2) by adding at the end the following:
                    ``(C) examine any relationship of a small business 
                concern seeking an award to any entity or individual 
                included on the lists, as published on the date of the 
                closing of the solicitation, described under 
                subsections (g)(16)(D) and (o)(20)(D).''.

SEC. 404. STRENGTHENING AGENCY RECOVERY AUTHORITY.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended by 
this Act, is amended--
            (1) in subsection (g)(18), as redesignated by section 402--
                    (A) in the matter preceding subparagraph (A), by 
                inserting ``, as adjusted for inflation according to 
                the Consumer Price Index published by the Bureau of 
                Labor Statistics,'' after ``amounts'';
                    (B) in subparagraph (A)--
                            (i) by inserting ``during the 10-year 
                        period beginning on the date of the award, or 
                        during a longer or indefinite period as 
                        determined by the head of the awarding agency 
                        as necessary for national security,'' before 
                        ``the small business concern''; and
                            (ii) by striking ``or'' at the end;
                    (C) in subparagraph (B)--
                            (i) by inserting ``during the 10-year 
                        period beginning on the date of the award, or 
                        during a longer or indefinite period as 
                        determined by the head of the awarding agency 
                        as necessary for national security,'' before 
                        ``there is a change''; and
                            (ii) by striking ``and'' at the end; and
                    (D) by adding at the end the following:
                    ``(C) during the 5-year period beginning on the 
                date of the award, or during a longer or indefinite 
                period as determined by the head of the awarding agency 
                as necessary for national security, the small business 
                concern sells, leases, or provides (through joint 
                research, technological licensing, or otherwise) 
                intellectual property that was developed, wholly or in 
                part, using an SBIR award to a foreign entity or 
                individual unless the foreign entity or individual is 
                incorporated in or a citizen of a country that is a 
                member of the North Atlantic Treaty Organization or a 
                major non-NATO ally, as described under section 2321k 
                of title 22, United States Code; or
                    ``(D) during the 10-year period beginning on the 
                date of the award, or during a longer or indefinite 
                period as determined by the head of the awarding agency 
                as necessary for national security, the small business 
                concern sells, leases, or provides (through joint 
                research, technological licensing, or otherwise) 
                intellectual property that was developed, wholly or in 
                part, using an SBIR award to an entity, government, or 
                individual in a foreign country of concern; and''; and
            (2) in subsection (o)(22), as redesignated by section 402--
                    (A) in the matter preceding subparagraph (A), by 
                inserting ``, as adjusted for inflation according to 
                the Consumer Price Index published by the Bureau of 
                Labor Statistics,'' after ``amounts'';
                    (B) in subparagraph (A)--
                            (i) by inserting ``during the 10-year 
                        period beginning on the date of the award, or 
                        during a longer or indefinite period as 
                        determined by the head of the awarding agency 
                        as necessary for national security,'' before 
                        ``the small business concern''; and
                            (ii) by striking ``or'' at the end;
                    (C) in subparagraph (B)--
                            (i) by inserting ``during the 10-year 
                        period beginning on the date of the award, or 
                        during a longer or indefinite period as 
                        determined by the head of the awarding agency 
                        as necessary for national security,'' before 
                        ``there is a change''; and
                            (ii) by striking ``and'' at the end; and
                    (D) by adding at the end the following:
                    ``(C) during the 5 year period beginning on the 
                date of the award, or during a longer or indefinite 
                period as determined by the head of the awarding agency 
                as necessary for national security, the small business 
                concern sells, leases, or provides (through joint 
                research, technological licensing, or otherwise) 
                intellectual property that was developed, wholly or in 
                part, using an STTR award to a foreign entity or 
                individual unless the foreign entity or individual is 
                incorporated in or a citizen of a country that is a 
                member of the North Atlantic Treaty Organization or a 
                major non-NATO ally, as described under section 2321k 
                of title 22, United States Code; or
                    ``(D) during the 10-year period beginning on the 
                date of the award, or during a longer or indefinite 
                period as determined by the head of the awarding agency 
                as necessary for national security, the small business 
                concern sells, leases, or provides (through joint 
                research, technological licensing, or otherwise) 
                intellectual property that was developed, wholly or in 
                part, using an STTR award to an entity, government, or 
                individual in a foreign country of concern; and''.

SEC. 405. BEST PRACTICES ON INVESTOR INFORMATIONAL RIGHTS.

    Section 9(uu) of the Small Business Act (15 U.S.C. 638(uu)) is 
amended to read as follows:
    ``(uu) Best Practices on Investor Informational Rights.--
            ``(1) In general.--The Administrator, in coordination with 
        the heads of all agencies with an SBIR program, the Director of 
        the White House Office of Science and Technology Policy, and 
        the Committee on Foreign Investment in the United States, shall 
        develop best practices to be shared with each recipient of an 
        SBIR or STTR award by the agency granting the award.
            ``(2) Contents.--The best practices developed under 
        paragraph (1) shall include recommendations for protecting the 
        proprietary technology and intellectual property of the small 
        business concern from being shared unintentionally to foreign 
        individuals and entities through informational rights of 
        limited partners in venture capital, hedge fund, or private 
        equity firms that have investments in SBIR or STTR 
        recipients.''.

SEC. 406. GAO REPORT.

    Paragraph (4) of section 4(b) of the SBIR and STTR Extension Act of 
2022 (Public Law 117-183; 136 Stat. 2194) is amended to read as 
follows:
            ``(4) GAO report.--
                    ``(A) In general.--Not later than 18 months after 
                the date of enactment of the INNOVATE Act, and annually 
                thereafter under September 30, 2028, the Comptroller 
                General of the United States shall conduct a study and 
                submit to the Committee on Small Business and 
                Entrepreneurship and the Committee on Armed Services of 
                the Senate and the Committee on Small Business, the 
                Committee on Armed Services, and the Committee on 
                Science, Space, and Technology of the House of 
                Representatives a report on the implementation and best 
                practices of the due diligence programs established 
                under section 9(vv) of the Small Business Act (15 
                U.S.C. 638(vv)) across Federal agencies required to 
                establish an SBIR or STTR program.
                    ``(B) Study.--The study shall evaluate--
                            ``(i) the effectiveness of each Federal 
                        agency that participates in the SBIR program or 
                        STTR program in identifying--
                                    ``(I) enhanced risk in 
                                cybersecurity practices in SBIR and 
                                STTR projects;
                                    ``(II) enhanced risk in patents, 
                                including co-authorship with academics 
                                in foreign countries of concern in SBIR 
                                and STTR projects;
                                    ``(III) enhanced foreign influence 
                                risk among employees of small business 
                                concerns involved in SBIR and STTR 
                                projects;
                                    ``(IV) foreign ownership of a small 
                                business concern seeking an award, 
                                including the financial ties and 
                                obligations (which shall include 
                                surety, equity, and debt obligations) 
                                in SBIR and STTR projects; and
                                    ``(V) security risks among 
                                applicants to the SBIR program or the 
                                STTR program, including connections to 
                                an entity, including any affiliates, 
                                spinouts, or subsidiaries of the 
                                entity, or individual on one or more of 
                                the lists referenced in paragraph 
                                (16)(D) of section 9(g) of the Small 
                                Business Act (15 U.S.C. 638(g));
                            ``(ii) by year, the number of proposals and 
                        number of small business concerns with foreign 
                        risks by each Federal agency that participates 
                        in the SBIR program or STTR program, including 
                        a delineation of how many of those small 
                        business concerns have previously received an 
                        award under the SBIR program or STTR program 
                        and the nature of those foreign risks made by 
                        each Federal agency; and
                            ``(iii) the extent to which the Inspector 
                        General and counterintelligence authorities of 
                        each Federal agency that participates in the 
                        SBIR or STTR program effectively conducts 
                        investigations, audits, inspections, and 
                        outreach relating to the due diligence program 
                        to assess security risks in the SBIR or STTR 
                        program.''.

                TITLE V--SIMPLIFYING SBIR-STTR STANDARDS

SEC. 501. IMPROVING DIRECT TO PHASE II AUTHORITIES.

    Section 9(cc) of the Small Business Act (15 U.S.C. 638(cc)) is 
amended to read as follows:
    ``(cc) Phase Flexibility.--
            ``(1) Awarding a phase ii award absent a phase i award.--
        Each agency with an SBIR program may provide to a small 
        business concern an award under Phase II of the SBIR program 
        with respect to a project, without regard to whether the small 
        business concern was provided an award under Phase I of an SBIR 
        program with respect to such project, if the head of the agency 
        determines that the small business concern has completed the 
        determinations described in subsection (e)(4)(A) with respect 
        to such project despite not having been provided a Phase I 
        award.
            ``(2) Limitations on awards.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the head of each agency with an SBIR 
                program may award not more than 10 percent of the funds 
                allocated for the SBIR program of the agency in a given 
                fiscal year under the authority of this subsection.
                    ``(B) National institutes of health and department 
                of defense.--The Director of the National Institutes of 
                Health may award not more than 30 percent of the funds 
                allocated for the SBIR program of the National 
                Institutes of Health in a given fiscal year and the 
                Secretary of Defense may award not more than 30 percent 
                of the funds allocated for the SBIR program of each 
                component in the Department of Defense in a given 
                fiscal year under the authority of this subsection.
                    ``(C) Limit on eligibility for awards.--An agency 
                may not make an award under this subsection to a small 
                business concern, including its affiliates, spinouts, 
                and subsidiaries, that has received more than 25 Phase 
                II awards.
                    ``(D) Limit on number of awards.--An agency may 
                make not more than 25 awards under this subsection to a 
                small business concern, including its affiliates, 
                spinouts, and subsidiaries.''.

SEC. 502. IMPROVING SBIR AND STTR DATA COLLECTION.

    (a) Additional Data Fields in SBIR Database.--Section 9(k)(1) of 
the Small Business Act (15 U.S.C. 638(k)(1)) is amended--
            (1) in subparagraph (E)(iv), by striking ``and'' at the 
        end;
            (2) in subparagraph (F)(v), by striking the period at the 
        end and inserting ``; and''; and
            (3) by adding at the end the following:
                    ``(G) for each award granted, whether the award is 
                classified or designated as--
                            ``(i) Phase 1A, under subsection (pp);
                            ``(ii) direct to Phase II, under subsection 
                        (cc);
                            ``(iii) subsequent Phase II, under 
                        subsection (bb)(1);
                            ``(iv) strategic breakthrough award under 
                        subsection (ff)(3);
                            ``(v) Phase III prime contract award; or
                            ``(vi) Phase III subcontract award.''.
    (b) Improving FPDS Data Tracking.--
            (1) In general.--The Administrator of General Services 
        shall update the Federal Procurement Data System described in 
        section 1122(a)(4) of title 41, United States Code, or any 
        successor system, to--
                    (A) require reporting on whether an award under the 
                SBIR or STTR program is classified or designated as--
                            (i) Phase 1A, under subsection (pp) of 
                        section 9 of the Small Business Act (15 U.S.C. 
                        638), as amended by this Act;
                            (ii) direct to Phase II, under subsection 
                        (cc) of such section;
                            (iii) subsequent Phase II, under subsection 
                        (bb)(1) of such section;
                            (iv) a strategic breakthrough award under 
                        subsection (ff)(3) of such section;
                            (v) a Phase III prime contract award; or
                            (vi) a Phase III subcontract award;
                    (B) require reporting on whether a contract is 
                designated as a Phase III contract; and
                    (C) allow a Government contracting officer, when 
                recording a Phase II or Phase III contract following on 
                from work done by a small business concern during a 
                Phase I or Phase II award to reference an SBIR or STTR 
                contract identification number for relevant prior SBIR 
                or STTR work done.
            (2) No new funds.--No additional funds are authorized to be 
        appropriated for the purpose of carrying out this subsection.

SEC. 503. STREAMLINING PROGRAM ADMINISTRATION.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended by 
this Act, is amended--
            (1) in subsection (bb)(3), by inserting ``or another 
        component of the same Federal agency'' after ``another Federal 
        agency'';
            (2) in subsection (gg)--
                    (A) in the heading, by striking ``Pilot Program'' 
                and inserting ``Commercialization Readiness Program'';
                    (B) by striking ``pilot'' each place the term 
                appears;
                    (C) by striking paragraph (7);
                    (D) by redesignating paragraph (8) as paragraph 
                (7); and
                    (E) by amending paragraph (7), as so redesignated, 
                to read as follows:
            ``(7) Definition.--In this subsection, the term `covered 
        Federal agency'--
                    ``(A) means a Federal agency participating in the 
                SBIR program or the STTR program; and
                    ``(B) does not include the Department of 
                Defense.'';
            (3) in subsection (hh)--
                    (A) by striking ``Funding.--'' and all that follows 
                through ``Federal agencies participating'' and 
                inserting ``Funding.--Federal agencies participating''; 
                and
                    (B) by striking paragraph (2);
            (4) in subsection (ii)(2)(B)--
                    (A) in clause (ii), by adding ``and'' at the end;
                    (B) in clause (iii), by striking ``; and'' and 
                inserting a period; and
                    (C) by striking clause (iv);
            (5) in subsection (qq)(3), by striking subparagraph (I);
            (6) in subsection (vv)(3), by striking subparagraph (C);
            (7) in subsection (yy)--
                    (A) in the subsection heading, by striking 
                ``Pilot'';
                    (B) by striking ``STTR Program.--'' and all that 
                follows through ``Not later than'' and inserting ``STTR 
                Program.--Not later than'';
                    (C) by striking paragraph (2); and
                    (D) by striking ``pilot''; and
            (8) in subsection (zz)--
                    (A) in the subsection heading, by striking 
                ``Pilot'';
                    (B) in paragraph (1)--
                            (i) in the paragraph heading, by striking 
                        ``pilot'' and inserting ``program'';
                            (ii) in subparagraph (B), by striking 
                        ``3.25'' and inserting ``3.50''; and
                            (iii) in subparagraph (C), by striking 
                        ``0.46'' and inserting ``0.21'';
                    (C) by striking paragraph (3); and
                    (D) by striking ``pilot'' each place the term 
                appears.

SEC. 504. EXTENDING SBIR AND STTR AUTHORIZATION.

    Section 9 of the Small Business Act (15 U.S.C. 638), as amended by 
this Act, is amended--
            (1) in subsection (m), by striking ``2025'' and inserting 
        ``2028''; and
            (2) in subsection (n)(1)(A), by striking ``2025'' and 
        inserting ``2028''.

                        TITLE VI--MISCELLANEOUS

SEC. 601. TECHNICAL AMENDMENTS.

    Section 9 of the Small Business Act (15 U.S.C. 638) is amended--
            (1) by striking ``small-business concerns'' each place it 
        appears and inserting ``small business concerns'';
            (2) by striking ``Committee on Small Business of the 
        Senate'' each place it appears and inserting ``Committee on 
        Small Business and Entrepreneurship of the Senate'';
            (3) by striking ``Committee on Science and the'' each place 
        it appears and inserting ``Committee on Science, Space, and 
        Technology and the'';
            (4) in subsection (d)(2), by striking ``small-business 
        firms'' and inserting ``small business concerns'';
            (5) in subsection (e)(3), by inserting ``concern'' after 
        ``small business'';
            (6) in subsection (g)(4)(A), by striking ``SBIR proposals'' 
        and inserting ``SBIR solicitations'';
            (7) in subsection (g)(10), by striking ``,,'' and inserting 
        ``,'';
            (8) in subsection (g)(13)(A), by inserting ``malign'' 
        before ``foreign talent recruitment program'';
            (9) in subsection (o)(8), by striking ``,,'' and inserting 
        ``,'';
            (10) in subsection (o)(17)(A), by inserting ``malign'' 
        before ``foreign talent recruitment program''; and
            (11) in subsection (vv)(2)(B), by inserting ``subsection'' 
        before ``(g)(13)''.

SEC. 602. REPEALS.

    (a) Repeal of Obsolete Provision.--Subsection (tt) of section 9 of 
the Small Business Act (15 U.S.C. 638(tt)) is repealed.
    (b) Repeal of Redundant Provision.--Subsection (oo) section 9 of 
the Small Business Act (15 U.S.C. 638(oo)) is repealed.

SEC. 603. SEVERABILITY.

    If any provision of this Act, or the application of such provision 
to any person or circumstance, is held to be invalid, the remainder of 
the Act, and the application of the remaining provisions, shall not be 
affected.
                                 <all>