Six innovation highlights in the new defense bill

The House and Senate have agreed to the John S. McCain National Defense Authorization Act for FY 2019. As anticipated, the legislation addresses many small business and innovation policies. Changes relevant to tech-based economic development affect SBIR, advanced manufacturing, and partnerships with defense labs.

• SBIR/STTR pilot reauthorizations. The bill extends a series of pilot programs through FY 2022. Specifically, “admin funds,” which give agencies the ability to fund a broad range of activities to strengthen applicants and awardees; phase flexibility; Phase II and III commercialization; and, Phase 0 Proof of Concept programs are continued.
• New SBIR pilots. The bill will require agencies to create a “commercialization pilot” that, unless the agency receives SBA permission to use an alternative, will award a second Phase II award to eligible businesses. A second new pilot aims to accelerate the pace of Defense SBIR awards.
• SBIR business assistance services. The section also expands agencies’ technical assistance authority to include business assistance services. Agencies can now select one or more vendors to provide business services to Phase I and II awardees, who can also purchase up to $50,000 in services per project.
• Advanced manufacturing demonstration. Each service will be required to have at least one activity demonstrating advanced manufacturing at a depot-level maintenance or arsenal facility, and a workforce development component is encouraged. The services may use grants, contracts, cooperative agreements and other partnership structures will be permitted.
• Cybersecurity for small manufacturers and universities. The legislation directs the department, in consultation with NIST, to develop a thorough program to advance cybersecurity. Activities include security roadmaps, a new certification process and technology transfer priorities. A separate section requires the consideration of a cybersecurity apprenticeship program.
• Support for Co-ops. SBDCs are directed to develop technical assistance and support for cooperative business structures, and several SBA lending programs are given specific authorities and encouragement to fund co-ops, including transitions from a traditional corporation to a cooperative structure.

Also significant is at least one section not in the bill. The House’s version included language that may have prevented the SBA from operating the Growth Accelerators Challenge and Regional Innovation Clusters. That language is not in the agreed final draft of the bill.

The NDAA is expected to pass both chambers of Congress soon.

Van Scoyoc Associates, the partner for SSTI’s Innovation Advocacy Council, contributed information for this article.