Sneak Preview: Improved Oversight Sought for HHS’ SBIR Program

May 21, 2014 | By Jerry Ashworth | Post a Comment

xsass_bookshot(The following was excerpted from an article in the Single Audit Information Service.) Officials with the Department of Health and Human Services are collaborating with HHS’ operating divisions to determine whether they should conduct more checks on the eligibility of businesses participating in HHS’ Small Business Innovation Research program, in response to concerns in a recent HHS Office of Inspector General audit.

The SBIR program awards funds to small businesses pursuing innovative research and development ideas that have potential for commercial use and that meet R&D needs for the federal government. All SBIR applicants must self-certify that they meet all of the eligibility requirements before receiving an award. To be eligible for a SBIR award, the applicant must:

  • have a principal investigator who is primarily employed by the small business;
  • have fewer than 500 total employees, including affiliates;
  • maintain a place of business in the U.S. and operate primarily within the U.S.; and
  • be organized as a for-profit entity.

Four HHS operating divisions — the National Institutes of Health, Centers for Disease Control and Prevention, Food and Drug Administration and Administration for Children and Families — issue HHS SBIR awards. Unlike other SBIR awarding agencies, HHS does not have a single office responsible for overseeing the programs. “If HHS does not properly oversee the SBIR program, it cannot evaluate the program’s success or ensure that awardees are eligible and are appropriately using funds,” OIG said.

After reviewing fiscal year 2011 data for the audit, OIG found that HHS’ operating divisions awarded $360 million in SBIR funds to about 1,000 awardees. Although all SBIR awardees self-certified that they met the eligibility requirements at the time of the award, OIG found that 31 percent had questionable eligibility for at least one requirement or unverified eligibility for at least one requirement. Although they are not required to do so, HHS’ operating divisions did not take any steps to independently verify that these awardees met eligibility requirements.


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