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Statement of Need: The White House's Innovation and Entrepreneurial Working Group (IEWG) is supporting an initiative to share best practices and improve the SBIR and Small Business Technology Transfer (STTR) Programs. During sessions concerning this initiative, SBA have discussed the issue of SBIR data rights and the need for clarification. In addition, SBA has worked with small businesses that have had difficulty protecting their SBIR data rights as a result of misunderstandings by the procuring agencies of the Government's rights to such data. As a result, SBA believes that the directive must be clarified. SBA is also proposing to amend the definition of Small Business Concern. SBA amended this definition in 13 CFR section 121.702 of its regulations, at 69 FR 70185 (Dec. 3, 2004). SBA is updating language in the Policy Directive to reflect the current definition as set forth in the regulations.

Summary of the Legal Basis: The Small Business Innovation Development Act of 1982 requires the SBA to "issue policy directives for the general conduct of the SBIR programs within the Federal Government." 15 U.S.C. 638(j)(1).

Alternatives: In clarifying SBIR data rights in the Directive, SBA considered using terms as defined in the sections of the FAR and DFARS that address SBIR data rights. However, SBA determined that some of the terms were not consistent with SBIR policy and other terms could be used with modification. For other proposed updates to the Directive, alternatives were not applicable.

Anticipated Costs and Benefits: SBA believes that clarifications to the directive regarding SBIR data rights will benefit both small businesses and the agencies. It is our understanding that there is a misunderstanding of or confusion surrounding the rights in data of each party to an SBIR Funding Agreement. This confusion has resulted in disagreements between parties. In some cases, the confusion about data rights may have resulted in small businesses shying away from the SBIR Program. Therefore, the potential benefits include a potential increase in responses to SBIR solicitations and savings of administrative costs as a result of fewer disputes. Ultimately, SBA believes there will be negligible costs to the Federal Government with respect to the award and monitoring of SBIR funding agreements as a result of this rule.

Risks: Not applicable.