ML19263H070
| ML19263H070 | |
| Person / Time | |
|---|---|
| Issue date: | 06/12/1980 |
| From: | Ahearne J NRC COMMISSION (OCM) |
| To: | Nelson G SENATE, SMALL BUSINESS |
| References | |
| NUDOCS 8007080076 | |
| Download: ML19263H070 (5) | |
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UNITED STATES o
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NUCLEAR REGULATORY COMMISSION WASHINGTON, D. C. 20555 e
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June 12, 1980 CHAIRMAN.
The Honorable Gaylord Nelson, Chairman
- Select Committee on Small Business United States Senate Washington, D.C.
20510
Dear Senator Nelson:
The Commission appreciates the opportunity to comment on S.
1860, the "Small Business Innovation Act of 1979."
The subject bill seeks to amend the Small Business Act (15 U.S.C.
631 et seq.) to require Federal agencies with a research and development budget to set aside a part of that budget for award by contract to small business concerns.
In addition, those agencies with a research and development budget in excess of $100,000,000 would be required to establish a Small Business Innovation Research (SBIR) 7rogram.
As the NRC's research budget is in excess' of this threshold amount, it would be required to establish a SBIR program.
The Commission fully supports the objectives of the bill.
However, the bill does in our view have some problems as presently drafted.
These problems are detailed in the attachment.
Sinc rely, i
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I J
O ohn F. Ahearne
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airman Attachment 8007080e g
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- CONCEPTUAL PROBLEMS 1.
It is worth noting that since small businesses receive less Onan 4% of Federal funds for research and development (page 2, Lines 9 and 10 of the bill) the additional one percentage point would be equivalent to an increase of more than 25% in utilization of the small business R&D base.
The current small business base may not be ible to absorb such an increase, particularly in a one year period.
Also, small businesses could attempt to subcontract a part of this increased work to large businesses, frustrating the basic purpose of this legislation.
For these reasons, it would be preferable to require the establishment of goals for the award of.R&D funds to small business as a subset of the goals required by Section 15(g) of the Small Business Act (added by PL 95-507).
2.
There are a number of points at which this legislation could be tied to PL 95-507.
For example, certain aspects of the SBIR program such as the required quarterly reports might (page 6, lines 19 and 20), logically, be handled by the Director of the newly created Office of Small and Disadvantaged' Business Utilization.
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SPECIFIC SECTIONS 1.
Section 103(b)(1)
" provide for the elimination of provisions of Federal research and development contracts which require businesses to absorb expenses of performance of the contract, and require Cha'c a Federal agency, when awarding any such contra'ct to a small business concern, negotiate fees for all services and expenses provided to the agency under such contract" The intent here is unclear.
Does it mean, for example, that Federal agencies should eliminate cost principles such as the one at FPR 1-15.205-17 which provides that interest cost (certainly an expense of contract performance) are unallowable?
The objectives of this part of the bill should be more clearly stated.
2.
Section 103(b)(B)
" require each Federal agency to include in the evaluation of persc~nel involved with the awarding of research and development contracts an eppraisal of the achievements and attitudes of such personnel in carrying out the provisions of paragraph (7);
and" The present Administration has already adopted this measure.
President Carter's memorandum to Heads of Departments and Agencies dated January 13, 1980, states:
"Both the Senior Executive Service System and the Merit Pay System requires goals and objectives for evaluating e=ployee performance.
Where it is feasible and appropriate I want the achievement of procurement goals in these two areas [small and small, disadvantaged business uti-lization] to be included as a performance objective.
This objebtive should be a critical element in the evaluation of procurement officials and related program personnel."
2 3.
Section 104(2)
"The term ' contract' means any contract, grant, or cooperative agreement entered into between any Federal agency and nny organization or person for the performance of experiments, developmental or research work and includes the assignment of any such contract, the substitution of parties to any such contract, and the letting of any subcontract to any such contract";
In its present form, the definition is confusing.
Specifically, the language beginning, and includes the assignment of any such contract..., " appears to be a referencr; to an assignment of contract performance.
If so, it would seem to be, at best, superfluous to the definition and, at worst, in conflict with 41 U.S.C.
15 which prohibits the transfer of a Government contract (discussion of this issue is at FPR 1-26.402).
This language should be deleted.
It should also be noted that the term " contract" as used elsewhere in the Small Business Act does not include grants and cooperative agreements within its meaning.
4.
Section 104(3)
"the term "small business concern" has the same meaning as in section 3 of the Small Business Act;"
It should be noted that Ehe Small Business Administration has proposed significant changes in its definition of "small business" (Federal Register, March 10, 1980, pp.
15442-49).
As currently written, the.. amount of Federal R&D funds awarded to small business in the base fiscal
3 year 1979 would use the old definition of small business.
However, the amount of R&D funds awarded to small business in future fiscal years would utilize the new definition.
If the new definition has the effect of eliminating many firms which were previously small businesses the difficulty of fulfilling these quotas will be even more of a concern.
Further, statistical comparability, required to accurately appraise Ehe performance of Federal agencies in this matter, would be lost.
5.
Section 104(5)
"the terms ' re se arch ' and 'research and development' have meanings given to such terms by the Cost Accounting Standards Board."
Part 400 of Title 4 of the CFR which contains the definitions used by the Cost Accounting Standards Board (CASB) defines " independent research and development costs" not "research" or "research and development,"
although there is a reference to a more helpful definition (Armed Services Procurement Regulation (ASPR)15-205.3E) buried in item No. 4.8.1. of the CASB Disclosure Statement (Form CASB-DS-1).
Instead, the bill should reference the definitions for "research and development" set forth in OMB Circular A-11, Section 44.2.
This definition has the added advantage of being the same as that used for the National Science Foundation Annual Survey of Federal Funds for Research, Development and OEher Scientific Activities.
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