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WASHINGTON – A key U.S. legislator says he will oppose the reauthorization of federal small business innovation grants favored by the Pentagon, raising doubts about how Congress will avoid expiring Sept. 30.

The Small Business Administration’s Innovation Research (SBIR) and Technology Transfer (STTR) awards, made in collaboration with a dozen federal agencies, are intended to help research companies and institutions develop promising technologies. The stimulus funding is valued by the Pentagon as it seeks to compete with China on innovation.

The total budget for the 40-year-old program increased by nearly $ 3.3 billion in 2019, with the Department of Defense accounting for the majority of awards. Individual grants range from tens of thousands of dollars to more than $ 200,000.

The opposition to renewal comes primarily from Sen. Rand Paul, the top Republican on the Senate Small Business and Entrepreneurship Committee. A Kentucky legislator will not support reauthorization of the programs as it stands, arguing that they do not have protections against contacts between SBIR and China program umpires, according to a spokesman.

Paul opposes companies whose business model is to produce SBIR-funded research but never to derive any small business from it, the spokesman said.

“There are currently serious risks to national security when China continues to steal technology seeded by this program,” according to the spokeswoman, who spoke on condition of anonymity. “Dr. Paul will not reauthorize this program without reforms to strengthen research security and prevent abusive behavior by bad actors lining their pockets with taxpayer dollars at the expense of new small businesses with new technologies able to access SBIR awards. ”

Panel Chairman Sen. Ben Cardin, D-Md., Said this week that discussions with Paul are ongoing, and that there are several legislative avenues to pass the SBIR / STTR extension.

Pentagon officials have urged Congress not to let programs end, which, they say, will hurt American technological, military and economic dominance. Under Secretary of Defense for Procurement and Maintenance William LaPlante and Under Secretary of Research and Engineering Heidi Shyu urged renewal in a June 3 letter to law makers.

“Failure to reauthorize the programs will mean that approximately 1,200 warlike needs will not be met through innovative research and technology development,” they said. “In addition, any failure could result in thousands of small businesses being forced to lay off workers, or diverted to other sources of finance, including foreign investment.”

Shyu and LaPlante said they had been “strengthening security management to ensure that SBIR / STTR-funded technology is not transmitted to opposing nations.”

SBIR has been extended and reauthorized several times since its initial enactment. In 2016, she and the STTR program were extended through September 30, 2022, by the fiscal 2017 National Defense Authorization Act.

There are several possible avenues for SBIR / STTR reauthorization this year, including legislation to boost the country’s technological competitiveness with China, Cardin said. The House version of the measure would reauthorize the programs.

The two chambers of Congress have passed their own versions of the measure, but time is running out before the summer recess of Congress, after which focusing on the midterm elections could complicate a compromise.

NDAA 2023 and appropriations legislation are other potential vehicles.

“We have various options but we are very committed to at least extending the SBIR / STTR programs permanently,” said Cardin.

Joe Gould is a senior Pentagon correspondent for Defense News, which covers the cross-section of national security policy, politics and the defense industry.

Bryant Harris is the Congress correspondent for Defense News. He has addressed the intersection of U.S. foreign policy and national security in Washington since 2014. He previously wrote for Foreign Policy, Al-Monitor, Al Jazeera English and IPS News.

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