	Introduction

The Small Business Research and Development Enhancement Act of 1992 established the Small Business Technology Transfer (STTR) Pilot Program and authorized it for 3 years, beginning in fiscal year 1994. The report states that the program addresses a core problem in U.S. economic competitiveness and that the existing SBIR Program does not provide a direct mechanism for technology transfer. The act required each federal agency with an STTR Program to develop, in consultation with the Office of Federal Procurement Policy and the Office of Government Ethics, procedures to ensure that research and development centers (1) are free from organizational conflicts of interests relative to the STTR Program; (2) do not use privileged information gained through work performed for an STTR agency or private access to STTR agency personnel in the development of an STTR proposal; and (3) use outside peer review, as appropriate. Evaluations of STTR Proposals for Research Quality and Commercial Potential Were Favorable, but the Review Process Varied Greatly

Agencies generally rated the quality of the proposed research and commercial potential in STTR proposals highly. (2) How is the innovation exciting? Conclusions

In general, technical evaluations of STTR proposals showed favorable views of the quality of proposed research and commercial potential. Agencies Have Taken Steps to Avoid Potential Problems Resulting From R&D Center Involvement

The legislation establishing the STTR Program required agencies to develop procedures to ensure that R&D centers are free from organizational conflicts of interest. Differing Views on the Effect of and Need for the STTR Program

Agency officials expressed differing views regarding the effect of STTR on SBIR and other agency R&D. The similarities between the STTR and SBIR Programs raise a broader issue about the need for the STTR Program.
Why GAO Did This Study

Pursuant to a legislative requirement, GAO reviewed the implementation of the Small Business Technology Transfer (STTR) Program, focusing on: (1) the quality and commercial potential of STTR research; (2) how agencies address potential conflicts of interest from the involvement of federally funded research and development (R&D) centers in STTR; and (3) the need for STTR in light of its similarity to the Small Business Innovation Research (SBIR) Program.

What GAO Found

GAO found that: (1) federal agencies rated the quality and commercial potential of STTR proposals favorably in 1994, but technical experts were concerned about the commercial potential of STTR research because of the newness of the program; (2) agencies have taken actions to avoid potential conflicts of interest arising from R&D centers' involvement in STTR, such as restricting centers' participation, preventing R&D centers from using confidential information in preparing STTR proposals, and ensuring centers' use of outside peer reviews; (3) although agencies have differing views regarding the effects of STTR on SBIR, there is no evidence of competition between STTR and SBIR for quality proposals; (4) the need for STTR is unclear due to its similarity to SBIR, and it will take years to comprehensively evaluate STTR effectiveness; and (5) Congress believes that STTR addresses a core problem in national economic competitiveness and SBIR does not provide a direct mechanism for technology transfer.