The federal government makes a crucial investment in the nation’s future when it provides funding for scientific research. These precious resources have produced breakthrough discoveries that led to new therapies, innovative technologies, economic growth, and improved quality of life. To ensure that this legacy continues in a period of budgetary constraint, federal research grants must go to the projects with greatest potential return: those with the most scientific merit and those addressing critical national needs. It is for this reason that we are dismayed to learn that Congress is considering proposals that would reduce the amount of funding that agencies can use to support open, competitive grant proposals.

Without the benefit of compelling argument and almost no public debate, legislation is being advanced that would carve out a larger portion of the federal research budget and limit it solely to applicants from small businesses. Currently, 3.2 percent of the research budget of federal agencies with extramural research budgets over $100 million is “set-aside” for grants to small businesses. In the House, HR 4783 would increase the Small Business Innovation Research (SBIR) set-aside from the current rate of 3.2 to 4.5 percent by FY 2022. A Senate bill, S 2812, would increase the SBIR set-aside to 6 percent by 2028. Set-asides for the Small Business Technology Transfer (STTR) program would increase as well.

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We appreciate the important role that private enterprise plays in the research process. Industry-based researchers have made path-breaking discoveries, and they are indispensable to the translation of new knowledge into useful products and processes.  We also endorse efforts to engage small businesses in the research process. Small start-up companies have taken ideas developed in federally funded university laboratories and used them to bring new products to the marketplace. The SBIR and STTR programs were set up to help them do this.

But the set-asides place limits on the opportunity for other applicants to compete. Today, competition for federal research grants is intense. Most agency research budgets have failed to keep pace with rising costs, and there is not enough money to support all of the exciting new ideas and research opportunities. In these times of fiscal constraint, it is especially critical for us to ensure that the competition for scarce research funding is fair and open.

Currently, there is no limit on the number of grants that can be made to small businesses. Every time the SBIR and STTR set-asides are raised, funding is cut from the other competitive grant programs. With research agency budgets so severely constrained, this loss will mean less research coming from the highly productive laboratories in universities, hospitals, research institutes, and larger corporations across the country.

There has been no evidence to justify an increase in the set-asides. In fact, data from the funding agencies demonstrate that small businesses are in an advantaged position relative to other grant applicants. As a result of prior increases in the set-aside, SBIR programs have grown at a much faster rate than other research programs. SBIR and STTR programs at the National Institutes of Health (NIH) increased from $680 million in fiscal year 2011 to $877 million in fiscal year 2016, an increase of 29 percent, while the agency’s total budget grew by only 4.5 percent. This increase took place while the number of SBIR and STTR proposals meeting the criteria for review by the agency declined from 6,415 in 2011 to 5,644 in 2015.

The SBIR and STTR programs are important. But there is no evidence demonstrating a need to increase the set-asides. Research funding from the U.S. government is a precious resource and a critical investment in our nation’s future. It is too important to be carved up into allocations to certain groups. It should be open to competition among all researchers so that we can support the best ideas.


Parker B. Antin is a professor at the University of Arizona and President of the Federation of American Societies for Experimental Biology (FASEB).