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What did the GAO find?
In June 2018, the Air Force implemented a new “Open Titles” process for Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) awards to attract new small businesses and rapidly deliver technology solutions to the Air Force. The new process gives companies more latitude to deliver technology solutions to meet the needs of the Air Force. Expansion of the new process coincided with an increase in the overall Air Force SBIR/STTR effort. In the year By the end of fiscal year 2020, the new process has largely displaced the agency’s traditional award process, where specific problems and mission needs are identified by the Air Force (see figure).
Number of companies awarded SBIR or STTR awards, dollars awarded, and awards through the Air Force Open Topics or regular SBIR/STTR awards process, fiscal years 2018 through 2020
*Companies that received both open titles and common awards in fiscal years 2018 through 2020 are included more than once in the bar graph showing the number of companies.
The Air Force’s new process was more effective than the traditional SBIR/STTR award process in attracting new companies and making awards faster. According to GAO’s analysis of Air Force SBIR/STTR award data and federal contract data, 43 percent of awardees of 1,001 open subjects had no prior federal contract, compared to 14 percent of 771 regular awardees. Also, the Air Force took an average of 108 to 126 fewer days to issue awards for the first phase of the SBIR/STTR program in fiscal years 2019 and 2020 for open titles. An An April 2021 study found that Open Titles awardees were more likely to receive subsequent venture capital or non-SBIR/STTR contracts.
Information and evaluation gaps, however, limit the Air Force’s ability to assess the effectiveness of the new process. The 2021 Impact Report did not address the increased participation of women-owned small businesses as called for in the Committee’s report. Also, Air Force participation in distressed businesses and company size did not confirm that the report’s data was timely and reliable. Ensuring that the information in such reports is current and reliable helps the Air Force assess the accessibility and effectiveness of the open topics process.
Why did the GAO do this study?
The Air Force is one of the largest federal funders of SBIR and STTR awards to small businesses. From fiscal years 2016 to 2020, it has awarded more than 4,800 awards to support companies’ technology marketing and technology solutions to meet the needs of the Air Force. Beginning in 2018, the Air Force rapidly expanded its new Open Titles SBIR/STTR award process.
A House committee report accompanying the fiscal year 2021 National Defense Authorization Act includes provisions for GAO to review the new process. This report describes (1) how the Air Force implemented the new award process and (2) what is known about the effectiveness of the process—compared to the Air Force’s traditional SBIR/STTR award process—attracting multiple companies; Reduction of awarding time; and enabling commercialization through subsequent venture capital investment or non-SBIR/STTR federal contracts.
GAO analyzed documents from fiscal years 2016 through 2020, including Air Force SBIR and STTR award data and evaluations of the new process. GAO also analyzed contract files for a non-comprehensive sample of 17 awards and interviewed Air Force and DoD officials and awardees.
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