WASHINGTON – Today Massachusetts Senators John Kerry and Edward M. Kennedy called on the Department of Defense to restore $260 million to Army and Air Force Small Business Innovation Research (SBIR) programs. This funding was temporarily reallocated within the agency earlier this year with the understanding it would be restored once the emergency supplemental appropriations bill passed. Although the bill was signed into law two weeks ago on May 25th, many small research and development firms have yet to receive their funds and resume their projects. This is harmful to many SBIR firms, with a particularly large impact in Massachusetts, the second largest recipient of all SBIR funds in the country. Each year about 200 Massachusetts firms receive Army and Air Force SBIR contracts, and in 2005, the contracts were worth $55 million.

"SBIR contracts help create the technologies of the future that will help keep our troops and our country safer. Massachusetts firms are leading the way in developing innovative solutions, and I am hopeful that the Defense Department will restore the money they borrowed from this important small business program quickly, as promised," said Kerry, Chairman of the Committee on Small Business and Entrepreneurship.

"The funding crisis that necessitated this reprogramming has subsided, and it is vital for these funds to be restored to the Small Business Innovation Research Program as quickly as possible so that this important research can continue with minimal impact. These SBIR programs provide cutting edge knowledge and technology to protect our troops and keep them out of harm's way," said Kennedy.

Massachusetts firms began receiving letters in early May stating that their funding would be delayed. While the funding shift was necessary earlier this year, funds are now available allowing the Department of Defense to take action to get funding to small firms. If the agency does not replace the $260 million in the SBIR program, small businesses in Massachusetts could potentially miss out on as much as $24 million in contracts for research and development of new technologies.

The SBIR program has allowed the Department of Defense to move projects through with shorter planning times. For example, in 2005, the Defense Department awarded 38 Phase I SBIR contracts to address the threat of Improvised Explosive Devices (IEDs). Within five months, 18 of these projects were in the next phase and prototypes were expected to be tested in the field within another six months.

The Small Business Innovation and Development Act, which became law in 1982, required federal agencies with large research budgets to grant a small percentage of research contracts to small businesses, creating the SBIR program. SBIR has been phenomenally successful, allowing growth in sectors of the economy which may have otherwise remained stagnant and creating competition to drive technological innovations.

To read the letter Senators Kennedy and Kerry sent to Defense Secretary Robert Gates, please click here.