The Small Business Innovation Development Act of 1982 required the SBA,  after consultation with certain agencies, to establish a policy directive for  the three-phase structure (see table 1) to include, among other things,  timing for receipt and review of proposals and funding guidelines. DOD Is Commercializing Space-Related SBIR Technologies but Lacks Complete Data on These Efforts

DOD is working to commercialize technologies under its space-related  SBIR program to deliver warfighter capabilities, but lacks complete data  on its commercialization efforts and therefore has limited insight into the  program’s effectiveness. DOD invests about 11 percent of its SBIR budget  in R&D and is soliciting more space-related research proposals from small  businesses. Further, there are challenges to executing the SBIR program  that DOD officials acknowledge the agency needs to address, such as the  lack of overarching guidance for the management of the DOD SBIR  Program. The number of space-related Phase I research topics submitted by DOD  services and components has increased from less than 8 percent in 2005 to  nearly 14 percent in 2009 (see fig. DOD Has Implemented Efforts to Increase Commercialization

There are a variety of programs and initiatives within DOD designed to  increase the commercialization of SBIR technologies. Although these efforts are not  specific to space technology development, they are intended to accelerate  the commercialization of technologies through their transition into DOD  acquisition programs or commercial-sector products or services. Air Force officials described the  commercialization of some space-related technologies that range from  software training solutions to hardware that supports multiple payloads  aboard a single launch vehicle, and various DOD officials highlighted the  potential value of developing space-related technologies through the SBIR  program. Various DOD officials stated that data are  hard to track and there are inconsistencies in recording and defining  commercialization. Of the roughly 500 Phase II space-related contracts awarded in fiscal year  2005 through 2009, DOD officials could not determine or specify the total  number of space-related Phase III contract awards. Stakeholders Perceive That Small Businesses Face Challenges to Participating in the Space Industrial Base

Most stakeholders in the space industrial base that we spoke with—DOD,  prime contractors, and small businesses—generally agreed that small  businesses participating in the DOD SBIR program face difficulties  transitioning their space-related technologies into a DOD acquisition  program. Small Businesses Identified Other Challenges to Participating in the DOD Space System Acquisitions Environment

Small businesses participating in the SBIR program identified other  challenges they believe inhibit their ability to participate in DOD space  system and weapon acquisitions, such as the potential for the loss of  intellectual property and a lack of technology “pull” from DOD acquisition  programs. Complete efforts to develop and issue SBIR program guidance to ensure  DOD military service and component-level SBIR officials are managing the  program in a manner intended to meet the full intent of the SBIR Policy  Directive. DOD partially concurred with our recommendation that DOD, in the near  term, should consider collecting data on all SBIR technologies that  transition into DOD acquisitions or commercial-sector products or  services, as well as ensure that these data are defined and recorded  consistently. However, given the fact that  most stakeholders in the space industrial base that we spoke with—DOD,  prime contractors, and small businesses—generally agreed that small  businesses participating in the DOD SBIR program face difficulties  transitioning their space-related technologies into DOD acquisition  programs, it would still be in DOD’s best interest to assess the extent to  which there are cost-effective improvements that could be made to  address these difficulties. Appendix I: Scope and Methodology

To determine the extent to which the Department of Defense (DOD) is  utilizing the Small Business Innovation Research (SBIR) Program to  develop and transition space-related technologies, we reviewed DOD  acquisition policies, memorandums, and other guidance concerning the  SBIR Program.
Why GAO Did This Study

To be competitive in the global economy, the United States relies heavily on innovation through research and development (R&D). The Small Business Innovation Development Act of 1982 established the Small Business Innovation Research (SBIR) Program to stimulate technological innovation among small businesses. SBIR offers one avenue for introducing technological innovation in the Department of Defense (DOD) space sector. GAO was asked to assess (1) the extent to which DOD is utilizing the SBIR program to develop and transition space-related technologies; and (2) whether small businesses face challenges to participating in the space industrial base. To do this, GAO analyzed program documentation and DOD data on the SBIR program and interviewed key officials.

What GAO Found

DOD is working to commercialize space-related technologies under its SBIR program by transitioning these technologies into acquisition programs or the commercial sector, but has limited insight into the program's effectiveness. DOD has invested about 11 percent of its fiscal years 2005-2009 R&D funds through its SBIR program to address space-related technology needs. Also, DOD is soliciting more space-related research proposals from small businesses. For example, the number of space-related research requests submitted by the military services and DOD components has increased from less than 8 percent in 2005 to nearly 14 percent in 2009. Further, DOD has implemented a variety of programs and initiatives to increase the commercialization of SBIR technologies and has identified instances where it has transitioned space-related technologies into acquisition programs or the commercial sector. For example, a small business developed an aluminum ring that enables multiple payloads to attach to a single launch vehicle. However, DOD lacks complete commercialization data to determine the effectiveness of the program in transitioning space-related technologies into acquisition programs or the commercial sector. Of the nearly 500 space-related contracts awarded in fiscal years 2005 through 2009, DOD officials could not, for various reasons, identify the total number of technologies that transitioned into acquisition programs or the commercial sector. For example, there are inconsistencies in recording and defining commercialization. Further, there are challenges to executing the SBIR program that DOD officials acknowledge and are planning to address, such as the lack of overarching guidance for managing the DOD SBIR Program. Most stakeholders GAO spoke with in the space industrial base--DOD, prime contractors, and small-business officials--generally agreed that small businesses participating in the DOD SBIR program face difficulties transitioning their space-related technologies into acquisition programs or the commercial sector. Although GAO did not assess the validity of the concerns cited, stakeholders GAO spoke with identified challenges inherent to developing space technologies, challenges because of the SBIR program's administration, timing, and funding issues and other challenges related to participating in the DOD space acquisitions environment. For example, some small-business officials said that working in the space community is challenging because the technologies often require more expensive materials and testing than other technologies. They also mentioned that delayed contract awards and slow contract disbursements have caused financial hardships. Additionally, several small businesses cited concerns with safeguarding their intellectual property.

What GAO Recommends

GAO recommends that DOD consider collecting data on all SBIR technologies that transition into DOD acquisitions or the commercial sector and ensure these data are defined and recorded consistently; complete efforts to develop and issue SBIR program guidance; and review the challenges identified by stakeholders in this report to assess the extent to which there are improvements that could be made to address them. DOD partially concurred to collect data, and concurred to develop and issue guidance. DOD did not agree to review the challenges identified by stakeholders. GAO believes this recommendation remains valid.