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SBA proposes to clarify one sentence in the SBIR/STTR Policy Directive, which relates to the eligibility of a successor-in-interest entity to receive an SBIR/STTR phase III award. This clarification is to confirm SBA’s long-standing interpretation of section 6(a)(5) of the SBIR/STTR PD, which is that successor-in-interest entities are eligible to receive SBIR/STTR phase III awards based on the SBIR/STTR phase I or phase II work previously performed by the acquired small business. To clarify the existing SBIR/STTR PD text and prevent future misinterpretation, SBA proposes to change the second sentence of paragraph 6(a)(5) to add reference to successor-in-interest entities.