	Several Mechanisms Have Been Established Over Time to Help Facilitate SBIR Technology Transition

Transitioning technologies from defense research organizations and  technology development programs, such as the SBIR program, to military  users has been a long-standing challenge for DOD. To address  technology transition challenges in DOD’s SBIR program, Congress and  DOD have established several program provisions and mechanisms over  the past decade, including the following:
Congress directed the establishment of the Commercialization Pilot  Program, subsequently renamed the Commercialization Readiness  Program, in fiscal year 2006 to accelerate the transition of SBIR- funded technologies to Phase III, especially those that lead to  acquisition programs and high priority military requirements, such as  fielded systems. Each military department’s SBIR program also has a network of  transition facilitators who manage the Commercialization Readiness  Program and other SBIR activities that support technology transition. Although the roles and responsibilities vary somewhat across  the military departments, in general, transition facilitators foster ties  among small businesses, military research laboratories, and the  acquisition community in support of transition opportunities, and  monitor project progress, including outcomes. In the fiscal year 2012 reauthorization of the SBIR  program, Congress authorized a pilot effort to allow the DOD SBIR  program the opportunity to use more of their SBIR funds (up to 3  percent) for program administration, technical assistance, and  commercialization and outreach activities. The military departments  have developed mechanisms to do this, which provide awardees  additional SBIR funding to move Phase II projects closer to transition. Further, at other  times, promising technologies are not taken advantage of because their  potential has not been adequately demonstrated or recognized, they do  not meet military user requirements, or users are unable to fund the final  stages of development and testing. DOD’s SBIR Program Has Developed Some Technologies that Support Military Users, but Lacks Comprehensive Data on Transition Outcomes

In our 2013 review, we found that the military department SBIR programs  have identified some technologies that successfully transitioned into  acquisition programs or fielded systems over the past several years, but  the extent of transition is unknown because comprehensive and reliable  transition data are not collected. The military departments collect  information on selected transition “success stories” on a somewhat ad  hoc basis from SBIR program officials, acquisition program officials, prime  contractors, or directly from small businesses. In addition to  less formal transition tracking efforts, the military departments use, to  varying degrees, two data systems—Company Commercialization  Reports (CCR) and the Federal Procurement Data System-Next  Generation (FPDS-NG)—to identify transition results for their programs. While these systems provide high-level commercialization information  that the departments use to track progress in achieving overall program  goals, the systems have significant gaps in coverage and data reliability  concerns that limit their transition tracking capabilities. In addition, the  systems are not designed to capture detailed information on acquisition  programs, fielded systems, or on projects that did not transition. DOD is in the Early Stages of Developing a Plan to Improve Technology Transition Reporting

New reporting requirements in the NDAA for fiscal year 2012 directed  DOD to begin reporting new SBIR-related transition information to SBA,  which is to be included in SBA’s annual report to designated  congressional committees. At the time of our 2013 review, DOD was still assessing how to comply  with the new transition reporting requirements directed by Congress, and  no specific plan that included a time line for meeting the requirements had  been established. DOD acknowledged that it may need to modify its  existing data systems or develop new tools to compile more complete and  accurate technology transition data, but cited several challenges to  obtaining better data. In a  recent update to our 2013 work, DOD officials confirmed that alternatives  are still being evaluated and no plan for how and when it would improve  the tracking and reporting of technology transition has been completed. Without better information on technology transition, questions  will remain as to whether the DOD SBIR program is providing the right  technologies at the right time to users, using effective approaches to  select, develop, and transition technologies, and providing tangible  benefits.
Why GAO Did This Study

DOD relies on its research and development community to identify, pursue, and develop new technologies that improve and enhance military operations and ensure technological superiority over adversaries. The SBIR program is a key mechanism for DOD to use small businesses to meet its research and development needs; stimulate technological innovation; foster and encourage participation by minority and disadvantaged persons in technological innovation; and increase private sector commercialization of innovations derived from federal research and development funding. DOD is the largest SBIR participant in the federal government, with over $1 billion spent annually on the program.
This testimony is based primarily on a report GAO issued in December 2013 and addresses: (1) practices the military departments use to facilitate the transition of SBIR technologies, (2) the extent to which these technologies are successfully transitioning to military users, such as weapon system programs or warfighters in the field, and (3) DOD's efforts to meet fiscal year 2012 NDAA transition reporting requirements. This statement draws from the 2013 report and other work GAO has conducted on technology transition activities in DOD's science and technology programs.

What GAO Found

Transitioning technologies from defense research and technology development programs, such as through the Small Business Innovation Research (SBIR) program, to military users has been a long-standing challenge for the Department of Defense (DOD). Over the past decade, Congress and DOD have taken several steps to address transition challenges in DOD's SBIR program. For example, the military departments can offer additional SBIR funding to certain awardees to supplement or extend technology development projects in order to move them closer to transition. Additionally, each of the military departments has a network of transition facilitators who work directly with small businesses, military research laboratories, and the acquisition community to foster transition opportunities. Further, in fiscal year 2012, Congress provided federal agencies the opportunity to use more of SBIR funding (up to 3 percent) for program administrative purposes, including activities that facilitate transition. However, at times, promising technologies are not taken advantage of because their potential has not been adequately demonstrated, they do not meet military requirements, or users are unable to fund the final stages of development and testing.
GAO found that DOD's SBIR program has developed some technologies that successfully transitioned into acquisition programs or fielded systems, but the extent of transition is unknown because comprehensive and reliable transition data are not collected. The military departments collect information on selected transition “success stories” on a somewhat ad hoc basis from SBIR program officials, acquisition program officials, prime contractors, or directly from small businesses. In addition to these less formal transition tracking efforts, the military departments use, to varying degrees, two data systems—Company Commercialization Reports and the Federal Procurement Data System-Next Generation—to identify transition results program-wide. While these systems provide high-level commercialization information that the departments use to track progress in achieving overall program goals, the systems have significant gaps in coverage and data reliability concerns that limit their transition tracking capabilities. In addition, the systems are not designed to capture detailed information on acquisition programs, fielded systems, or on projects that did not transition.
The National Defense Authorization Act (NDAA) for fiscal year 2012 directed DOD to begin reporting the number and percentage of SBIR projects that transition into acquisition programs or to fielded systems, among other things. DOD acknowledged that it may need to modify its existing data systems or develop new tools to compile more complete and accurate technology transition data. At the end of 2013, DOD was still assessing how to comply with the new transition reporting requirements, and had not established a specific plan, as GAO had recommended, for how and when it would be able to meet the requirements. In a recent update, DOD officials confirmed that alternatives are still being evaluated and no plan for improving the tracking and reporting of technology transition has been completed. Without better information on technology transition outcomes, questions will remain as to whether the DOD SBIR program is providing the right technologies at the right time to users, using effective approaches to select, develop, and transition technologies, and providing tangible benefits.