Deputy Secretary of Defense Kathleen Hicks has signed a memorandum to establish new guidance to mitigate security risks in funding applications of small businesses with foreign ties, the Pentagon announced on May 23.
The memo – issued to the department on May 13 – establishes policy and provides guidance for the implementation of a due diligence initiative for the Department of Defense’s (DoD) Defense Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs.
The DoD established the Defense SBIR and STTR Due Diligence Program, in accordance with the SBIR and STTR Extension Act of 2022, to help mitigate security risks when small business concerns with ties from any foreign country of concern seek SBIR/STTR funding.
According to the memo, the Office of the Undersecretary of Defense for Research and Engineering (OUSD(R&E)) will be responsible for ensuring that common minimum standards established through the policy for the Due Diligence Program are implemented across all DoD components that make awards under the SBIR and STTR programs.
“We value the innovations and technologies derived from [small business concerns] that enhance warfighter capabilities to support the DoD mission,” Gina Sims, Defense SBIR/STTR Program director, said in a statement. “Working closely with the R&E leadership and DoD services and components, we will successfully implement this plan to vigilantly protect taxpayer funds and small businesses from foreign influence.”
The new policy also now requires proposals to the Defense SBIR/STTR Innovation Portal to include security risk assessment forms to be evaluated to incorporate due diligence requirements.
As a result, all proposals submitted to the portal must include forms that assess security risks, and proposals without these forms will not receive an evaluation.
The Pentagon also launched an online course on foreign ownership, control, or influence (FOCI), which defines the issue, explains what being under FOCI means, and details FOCI’s effect on a company seeking a SBIR/STTR award to assist small businesses.
“As we strengthen our Due Diligence Program policy and implementation guidance, we want to assure small businesses that we are with them every step of the way and will provide the necessary support to ensure success,” Sims said.
