Accelerating Defense Innovation Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 3014 To amend title 10, United States Code, and the Small Business Act to improve innovation in defense procurement, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MAY 23, 2019 Mr. THORNBERRY introduced the following bill; which was referred to the Committee on Armed Services, and in addition to the Committees on Small Business, and Science, Space, and Technology, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee con- cerned A BILL To amend title 10, United States Code, and the Small Busi- ness Act to improve innovation in defense procurement, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Accelerating Defense Innovation Act of 2019’’. 5 (b) TABLE OF CONTENTS.— 6 Sec. 1. Short title and table of contents. VerDate Sep 11 2014 20:10 Jun 10, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 E:\BILLS\H3014.IH H3014 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 3014 IH Sec. 2. Alignment of the Small Business Innovation Research Program and Small Business Technology Transfer Program of the Depart- ment of Defense with the National Defense Science and Tech- nology Strategy. Sec. 3. Pilot program for domestic investment under the SBIR program. Sec. 4. Cybersecurity technical and business assistance for SBIR and STTR programs. Sec. 5. Phase 0 proof of concept partnership program for the Department of Defense. Sec. 6. Modification to the Defense Research and Development Rapid Innova- tion Program. Sec. 7. Establishment of joint reserve detachments at Defense Innovation Unit. SEC. 2. ALIGNMENT OF THE SMALL BUSINESS INNOVATION 1 RESEARCH PROGRAM AND SMALL BUSINESS 2 TECHNOLOGY TRANSFER PROGRAM OF THE 3 DEPARTMENT OF DEFENSE WITH THE NA- 4 TIONAL DEFENSE SCIENCE AND TECH- 5 NOLOGY STRATEGY. 6 (a) IN GENERAL.—The Secretary of Defense and 7 Secretaries of the military departments shall, to the extent 8 possible, align the research topics selected for activities 9 conducted under the Small Business Innovation Research 10 Program and Small Business Technology Transfer Pro- 11 gram (as defined under section 9 of the Small Business 12 Act (15 U.S.C. 638)) with the National Defense Science 13 and Technology Strategy established under section 218 of 14 the John S. McCain National Defense Authorization Act 15 for Fiscal Year 2019 (Public Law 115–232; 132 Stat. 16 1679). 17 (b) USE OF NATIONAL DEFENSE SCIENCE AND 18 TECHNOLOGY STRATEGY TO DETERMINE RESEARCH 19 VerDate Sep 11 2014 20:10 Jun 10, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3014.IH H3014 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 3014 IH TOPICS.—Section 9 of the Small Business Act (15 U.S.C. 1 638) is amended— 2 (1) in subsection (g)(3)(B), by striking ‘‘, in the 3 1992 report’’ and all that follows through ‘‘that au- 4 thority’’ and inserting ‘‘in the National Defense 5 Science and Technology Strategy established under 6 section 218 of the John S. McCain National Defense 7 Authorization Act for Fiscal Year 2019 (Public Law 8 115–232; 132 Stat. 1679)’’; and 9 (2) in subsection (o)(3)(B), by striking ‘‘, in ac- 10 cordance with section 2522 of title 10, United States 11 Code’’ and inserting ‘‘in the National Defense 12 Science and Technology Strategy established under 13 section 218 of the John S. McCain National Defense 14 Authorization Act for Fiscal Year 2019 (Public Law 15 115–232; 132 Stat. 1679)’’. 16 SEC. 3. PILOT PROGRAM FOR DOMESTIC INVESTMENT 17 UNDER THE SBIR PROGRAM. 18 (a) SENSE OF CONGRESS.—It is the sense of Con- 19 gress that the Administrator of the Small Business Ad- 20 ministration should promulgate regulations to carry out 21 the requirements under section 9(dd) of the Small Busi- 22 ness Act (15 U.S.C. 638(dd)) that— 23 (1) permit small business concerns that are ma- 24 jority-owned by multiple venture capital operating 25 VerDate Sep 11 2014 20:10 Jun 10, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3014.IH H3014 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 3014 IH companies, hedge funds, or private equity firms to 1 participate in the SBIR program in accordance with 2 such section; 3 (2) provide specific information regarding eligi- 4 bility, participation, and affiliation rules to such 5 small business concerns; and 6 (3) preserve and maintain the integrity of the 7 SBIR program as a program for small business con- 8 cerns in the United States by prohibiting large enti- 9 ties or foreign-owned entities from participation in 10 the SBIR program. 11 (b) DOMESTIC INVESTMENT PILOT PROGRAM.— 12 (1) IN GENERAL.—Not later than 1 year after 13 the date of the enactment of this Act and notwith- 14 standing the requirements of section 9(dd) of the 15 Small Business Act (15 U.S.C. 638(dd)), the Sec- 16 retary of Defense shall create and administer a pro- 17 gram to be known as the ‘‘Domestic Investment 18 Pilot Program’’ under which the Secretary and the 19 service acquisition executive for each military de- 20 partment may make a SBIR award to a small busi- 21 ness concern that is majority-owned by multiple ven- 22 ture capital operating companies, hedge funds, or 23 private equity firms without providing the written 24 VerDate Sep 11 2014 20:10 Jun 10, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3014.IH H3014 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 3014 IH determination described under paragraph (2) of such 1 section 9(dd). 2 (2) LIMITATION.—The Secretary of Defense 3 may award not more than 15 percent of the funds 4 allocated for the SBIR program of the Department 5 of Defense under section 9(f) of the Small Business 6 Act (15 U.S.C. 638(f)) to small business concerns 7 that are owned in majority part by multiple venture 8 capital operating companies, hedge funds, or private 9 equity firms through competitive, merit-based proce- 10 dures that are open to all eligible small business con- 11 cerns. 12 (3) EVALUATION CRITERIA.—In carrying out 13 the Domestic Investment Pilot Program, the Sec- 14 retary of Defense may not use investment of venture 15 capital or investment from hedge funds or private 16 equity firms as a criterion for the award of contracts 17 under the SBIR program or STTR program. 18 (4) ANNUAL REPORTING.—The Secretary of 19 Defense shall include as part of each annual report 20 required under section 9(b)(7) of the Small Business 21 Act (15 U.S.C. 638(9)(b)(7))— 22 (A) information on the implementation of 23 the Domestic Investment Pilot Program; 24 VerDate Sep 11 2014 20:10 Jun 10, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3014.IH H3014 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 3014 IH (B) the number of proposals received from 1 small business concerns that are majority- 2 owned by multiple venture capital operating 3 companies, hedge funds, or private equity firms 4 for the Domestic Investment Pilot Program; 5 and 6 (C) the number of awards made to such 7 small business concerns. 8 (5) TERMINATION.—The Domestic Investment 9 Pilot Program established under this subsection 10 shall terminate on September 30, 2022. 11 (c) DEFINITIONS.—In this section: 12 (1) SBIR.—The term ‘‘SBIR’’ has the meaning 13 given in section 9(e) of the Small Business Act (15 14 U.S.C. 638(e)). 15 (2) SMALL BUSINESS ACT DEFINITIONS.—The 16 terms ‘‘small business concern’’, ‘‘venture capital op- 17 erating company’’, ‘‘hedge fund’’, and ‘‘private eq- 18 uity firm’’ have the meanings given those terms, re- 19 spectively, in section 3 of the Small Business Act 20 (15 U.S.C. 632). 21 SEC. 4. CYBERSECURITY TECHNICAL AND BUSINESS AS- 22 SISTANCE FOR SBIR AND STTR PROGRAMS. 23 Section 9(q)(1) of the Small Business Act (15 U.S.C. 24 638(q)(1)) is amended— 25 VerDate Sep 11 2014 20:10 Jun 10, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3014.IH H3014 pamtmann on DSKBFK8HB2PROD with BILLS 7 •HR 3014 IH (1) in the matter preceding subparagraph (A), 1 by inserting ‘‘cybersecurity,’’ after ‘‘product sales,’’; 2 and 3 (2) in subparagraph (A), by striking ‘‘deci- 4 sions’’ and inserting ‘‘decisions, including decisions 5 relating to cybersecurity practices’’. 6 SEC. 5. PHASE 0 PROOF OF CONCEPT PARTNERSHIP PRO- 7 GRAM FOR THE DEPARTMENT OF DEFENSE. 8 Section 9(jj) of the Small Business Act (15 U.S.C. 9 638) is amended— 10 (1) in paragraph (1), by striking ‘‘The Director 11 of the National Institutes of Health’’ and inserting 12 ‘‘A covered agency head’’; 13 (2) by striking ‘‘The Director’’ each place it ap- 14 pears and inserting ‘‘A covered agency head’’; 15 (3) by striking ‘‘the Director’’ each place it ap- 16 pears and inserting ‘‘a covered agency head’’; 17 (4) in paragraph (2)— 18 (A) by amending subparagraph (A) to read 19 as follows: 20 ‘‘(A) the term ‘covered agency head’ 21 means— 22 ‘‘(i) with respect to the STTR pro- 23 gram of the National Institutes of Health, 24 VerDate Sep 11 2014 20:10 Jun 10, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3014.IH H3014 pamtmann on DSKBFK8HB2PROD with BILLS 8 •HR 3014 IH the Director of the National Institutes of 1 Health; or 2 ‘‘(ii) with respect to the STTR pro- 3 gram of the Department of Defense, the 4 Secretary of Defense;’’; and 5 (B) in subparagraph (C), by striking ‘‘in 6 the National Institutes of Health’s STTR pro- 7 gram’’ and inserting ‘‘in either the STTR pro- 8 gram of the Department of Defense or the 9 STTR program of the National Institutes of 10 Health’’; and 11 (5) in paragraph (4)(A), by inserting ‘‘partici- 12 pating in the STTR program administered by such 13 agency head’’ after ‘‘a qualifying institution’’. 14 SEC. 6. MODIFICATION TO THE DEFENSE RESEARCH AND 15 DEVELOPMENT RAPID INNOVATION PRO- 16 GRAM. 17 (a) INCREASE TO FUNDING.—Section 2359a(b)(3) of 18 title 10, United States Code, is amended by striking 19 ‘‘$3,000,000’’ and inserting ‘‘$6,000,000’’. 20 (b) REPORT.—Not later than 180 days after the date 21 of the enactment of this Act, the Secretary of Defense 22 shall submit to the congressional defense committees a re- 23 port on the program established under section 24 2359a(b)(3) of title 10, United States Code (commonly 25 VerDate Sep 11 2014 20:10 Jun 10, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3014.IH H3014 pamtmann on DSKBFK8HB2PROD with BILLS 9 •HR 3014 IH known as the ‘‘Defense Research and Development Rapid 1 Innovation Program’’), which shall include— 2 (1) with respect to the two fiscal years pre- 3 ceding the submission of the report— 4 (A) a description of the total number of 5 proposals funded under the program; 6 (B) the percent of funds made available 7 under the program for Small Business Innova- 8 tion Research Program projects; and 9 (C) a list of Small Business Innovation Re- 10 search Program projects that received funding 11 under the program that were included in major 12 defense acquisition programs (as defined in sec- 13 tion 2430 of title 10, United States Code) and 14 other defense acquisition programs that meet 15 critical national security needs; and 16 (2) an assessment on the effectiveness of the 17 program in stimulating innovation technologies, re- 18 ducing acquisition or life-cycle costs, addressing 19 technical risk, and improving the timeliness and 20 thoroughness of test and evaluation outcomes. 21 SEC. 7. ESTABLISHMENT OF JOINT RESERVE DETACH- 22 MENTS AT DEFENSE INNOVATION UNIT. 23 (a) ESTABLISHMENT.—The Secretary of Defense, in 24 consultation with the Secretaries of the military depart- 25 VerDate Sep 11 2014 20:10 Jun 10, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3014.IH H3014 pamtmann on DSKBFK8HB2PROD with BILLS 10 •HR 3014 IH ments, shall establish not fewer than three joint reserve 1 detachments (referred to in this section as ‘‘Detach- 2 ments’’) at locations of the Defense Innovation Unit— 3 (1) to support engagement and collaboration 4 with commercial innovation hubs; and 5 (2) to accelerate the transition and adoption of 6 commercial technologies for national security pur- 7 poses. 8 (b) COMPOSITION.—Each Detachment shall be com- 9 posed of members of the reserve components who possess 10 relevant private sector experience in the fields of business, 11 acquisition, intelligence, engineering, technology transfer, 12 science, mathematics, contracting, procurement, logistics, 13 cyberspace security, or such other fields as are determined 14 to be relevant by the Under Secretary of Defense for Re- 15 search and Engineering. 16 (c) RESPONSIBILITIES.—The Detachments shall have 17 the following responsibilities: 18 (1) Each Detachment shall provide the Depart- 19 ment of Defense with expertise, analysis, alternatives 20 for innovation, and opportunities for greater engage- 21 ment and collaboration between the defense innova- 22 tion ecosystem and commercial industry. 23 (2) Each Detachment shall, on an ongoing 24 basis— 25 VerDate Sep 11 2014 20:10 Jun 10, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3014.IH H3014 pamtmann on DSKBFK8HB2PROD with BILLS 11 •HR 3014 IH (A) recruit, retain, and employ members of 1 the reserve components who possess relevant 2 private sector experience, as described in sub- 3 section (b); 4 (B) partner with the military services, the 5 combatant commands, and other Department of 6 Defense organizations to seek and rapidly pro- 7 totype advanced commercial solutions while 8 lowing the barrier to entry to serve defense re- 9 quirements; 10 (C) increase awareness of— 11 (i) the technology portfolios of the De- 12 fense Innovation Unit; and 13 (ii) the technology requirements of the 14 Department of Defense as identified in the 15 National Defense Science and Technology 16 Strategy developed under section 218 of 17 the John S. McCain National Defense Au- 18 thorization Act for Fiscal Year 2019 (Pub- 19 lic Law 115–232; 132 Stat. 1679); 20 (D) capitalize on the growing investment 21 in research and development made by the com- 22 mercial industry in assessing and maturing 23 dual-use technologies; and 24 VerDate Sep 11 2014 20:10 Jun 10, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3014.IH H3014 pamtmann on DSKBFK8HB2PROD with BILLS 12 •HR 3014 IH (E) carry out such other activities as may 1 be directed by the Under Secretary of Defense 2 for Research and Engineering. 3 (d) DEADLINE FOR ESTABLISHMENT OF DETACH- 4 MENTS.—The Secretary of Defense shall ensure that— 5 (1) at least one Detachment is established on or 6 before October 1, 2020; and 7 [Text truncated for display. Full text available on Congress.gov.]