Sec. 861. Modifications to the Defense Research and Development Rapid Innovation Program
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Section 4061 of title 10, United States Code, is amended— in subsection (a)(1), by striking fielding of technologies developed pursuant to phase II Small Business Innovation Research Program projects, phase II Small Business Technology Transfer Program projects and inserting fielding of technologies developed pursuant to other programs within the Department of Defense or the Federal Government to mature fundamental or applied technology ; in subsection (b)— by striking the first sentence and inserting the following:
The Secretary shall direct the Director of the Office of Small Business Programs to issue guidelines for the operation of the program in coordination with the Under Secretary of Defense for Research and Engineering. ; by striking paragraph
(3)and redesignating paragraphs
(4)through
(7)as paragraphs
(3)through (6), respectively; in paragraph (1), by adding at the end the following: This may include candidate proposals that have been previously selected through other agency competitive procedures. ; in paragraph (2), by adding at the end the following: Projects that have been selected through this competitive process are eligible to receive sole-source awards subsequently for production or integration into a system of record. ; in paragraph (3), as redesignated by subparagraph (B), by striking No project shall receive more than a total of two years of funding under the program and inserting Projects may be funded to develop an initial concept (Phase I), mature a technology (Phase II), or integrate the technology in a system of record or operational environment (Phase III). No project shall receive more than a total of one year of funding under the program for Phase I, four years for Phase II, or three years for Phase III ; in paragraph (6), as so redesignated, by inserting and universities that make proposals with significant small business participation after small business concerns ; and by adding at the end the following new paragraph: A requirement that no agreement may be entered into unless the Secretary of the military department concerned certifies in writing that the successful transition of the program to Phase III and into the acquisition process is expected to meet high priority military requirements of such military department. ; in subsection (c), by inserting congressional before earmark ; by amending subsection
(d)to read as follows: Not less than 3.2 percent of the extramural budget for research, development, test, and evaluation of the Department of Defense in excess of $100,000,000 shall be used to field technologies under the program. Up to 0.5 percent of the amount required under paragraph
(1)may be used to cover administrative costs associated with the program. ; and by adding at the end the following new subsection: The Director of the Office of Small Business Programs shall— set a goal to increase the number of contracts awarded by the Secretary that lead to technology transition into programs of record or fielded systems; use incentives in effect on December 31, 2021, or create new incentives, to encourage agency program managers and prime contractors to meet the goal under paragraph (1); and submit to the congressional defense committees — the number and percentage of contracts awarded by the Secretary that led to technology transition into programs of record or fielded systems; information on the status of each project that received funding the program and efforts to transition those projects into programs of record or fielded systems; and a description of each incentive that has been used by the Secretary under paragraph
(2)and the effectiveness of that incentive with respect to meeting the goal under paragraph (1). . Chapter 303 of title 10, United States Code, is amended by inserting after section 4062 the following new section: Subject to the availability of appropriations for this purpose, the Secretary of Defense shall, acting through the Under Secretary of Defense for Research and Engineering and in coordination with the Under Secretary of Defense for Acquisition and Sustainment, carry out a pilot program, for no less than five years, to accelerate the development of advanced technology for national security by creating incentives for trusted private capital to invest in domestic small businesses or nontraditional businesses that are developing technology that the Secretary considers necessary to support the modernization of the Department of Defense and national security priorities. The purposes of the program required by paragraph
(1)are as follows: To promote the global superiority of the United States in advanced technologies of importance to national security, which are not adequately supported by private sector investment. To accelerate the transition and deployment of advanced technologies into the Armed Forces. To inform Department investment through coordinating planning consideration, technology roadmaps, and other analysis, as appropriate. In carrying out subsection (a), the Secretary shall enter into a public-private partnership with one or more for-profit persons using criteria that the Secretary shall establish for purposes of this subsection. The criteria established under paragraph
(1)for entering into a public-private partnership with a person shall include the following: The person shall be independent. The person shall be free from foreign oversight, control, influence, or beneficial ownership. The person shall have commercial private capital fund experience with technology development in the defense and commercial sectors. The person shall be eligible for access to classified information (as defined in the procedures established pursuant to section 801(a) of the National Security Act of 1947 ( 50 U.S.C. 3161(a) )). The Secretary and a person with whom the Secretary enters a partnership under paragraph
(1)shall enter into an operating agreement that sets forth the roles, responsibilities, authorities, reporting requirements, and governance framework for the partnership and its operations. Pursuant to a public-private partnership entered into under subsection (b), a person with whom the Secretary has entered the partnership shall invest equity in domestic small businesses or nontraditional businesses consistent with subsection (a). Investments under subparagraph
(A)shall be selected based on their technical merit, economic considerations, and ability to support modernization goals of the Department. Pursuant to a public-private partnership entered into under subsection (b), a person described in paragraph (1)(A) shall, in order to support investment of equity under paragraph (1), raise private capital only from trusted capital sources. A person described in subparagraph
(A)shall have sole authority to raise funds for, operate, manage, and invest capital raised under such subparagraph. Not later than one year after the date of the enactment of this section, the Secretary shall provide to the congressional defense committees— a briefing on the implementation of this section; and a report on the feasibility of implementing loan guarantees as an aspect to enhance the effectiveness of this program, including— a detailed description of how loan guarantees would be vetted, approved, and managed, including mechanisms to protect the government’s interests; and how such loan guarantees would be coordinated with other government invest mechanisms or other private sector financing. Not later than five years after the date of the enactment of this section, the Secretary shall provide the congressional defense committees a briefing on the outcomes of the pilot program and the feasibility and advisability of making it permanent. In this section: The term domestic business has the meaning given the term U.S. business in section 800.252 of title 31, Code of Federal Regulations, or successor regulation. The term domestic small businesses or nontraditional businesses means— a small businesses that is a domestic business; or a nontraditional business that is a domestic business. The term free from foreign oversight, control, influence, or beneficial ownership , with respect to a person, means a person who has not raised and managed capital from a person or entity that is not trusted and is otherwise free from foreign oversight, control, influence, or beneficial ownership. The term independent , with respect to a person, means a person who lacks a conflict of interest accomplished by not having entity or manager affiliation or ownership with an existing fund. The term nontraditional business has the meaning given the term nontraditional defense contractors in section 3014 of this title. The term small business has the meaning given the term small business concern in section 3 of the Small Business Act ( 15 U.S.C. 632 ). . The table of sections at the beginning of such chapter is amended by inserting after the item relating to section 4062 the following new item: 4063. Public-private partnership technology investment program. .
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Sec. 861
Modifications to the Defense Research and Development Rapid Innovation Program
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