Sec. 2. Bolstering research security of SBIR and STTR awards

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Section 9 of the Small Business Act ( 15 U.S.C. 638 ) is amended— in subsection (g)— by redesignating paragraphs (15), (16), and

(17)as paragraphs (16), (18), and (19), respectively; by inserting after paragraph

(14)the following: evaluate whether a small business concern presents a security risk for any reason, through measures including— the due diligence process required under subsection (vv); disclosures submitted under this subsection; or coordination with the intelligence community, as defined in section 3 of the National Security Act of 1947 ( 50 U.S.C. 3003 ), Federal law enforcement, and other counterintelligence capabilities of the Federal Government; ; in paragraph (16), as so redesignated— by striking subparagraph (B); by striking that— and all that follows through the small business concern submitting and inserting that the small business concern submitting ; by redesignating clauses (i), (ii), and

(iii)as subparagraphs (A), (B), and (C), respectively, and adjusting the margins accordingly; in subparagraph (B), as so redesignated, by striking or at the end; in subparagraph (C), as so redesignated, by striking and at the end; and by adding at the end the following: has a security risk connecting the small business concern to an entity, including any affiliates of the entity, or individual on— the UFLPA Entity List maintained by the Department of Homeland Security; the Non-SDN Chinese Military-Industrial Complex Companies List of the Office of Foreign Assets Control maintained by the Department of the Treasury; the Section 889 Prohibition List established under section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 ( Public Law 115–232 ; 132 Stat. 1917) and maintained by the Department of Defense; the list of Chinese Military companies required under section 1260H of the William M.

(Mac)Thornberry National Defense Authorization Act for Fiscal Year 2021 ( 10 U.S.C. 113 note) and maintained by the Department of Defense; the Military End User List maintained by the Bureau of Industry and Security of the Department of Commerce; the Entity List maintained by the Bureau of Industry and Security of the Department of Commerce; the List of Equipment and Services maintained by the Federal Communications Commission; or the Withhold Release Orders and Findings List maintained by U.S. Customs and Border Protection; has a security risk with a primary source that is classified; or has a security risk that the Federal agency determines warrants a denial; ; by inserting after paragraph (16), as so redesignated, the following: provide for— a process under which, upon making an award decision to deny an application on the basis of a determination under paragraph (16), or upon making a determination under paragraph

(16)that a small business concern has a security risk described in that paragraph, the Federal agency provides to the small business concern, as appropriate pursuant to the discretion of the Federal agency and in a manner that does not compromise national security, a notification— advising the small business concern of such determination; and identifying the basis for such determination; and a policy that clarifies that receipt of an award decision denying an application does not prohibit the small business concern from being eligible for an award in a subsequent award cycle; ; in paragraph (19), as so redesignated— in subparagraph (B), by striking paragraph (16)(A) and inserting paragraph (18)(A) ; and in subparagraph (C), by striking paragraph (16)(B) and inserting paragraph (18)(B) ; in subsection (o)— by redesignating paragraphs (19), (20), and

(21)as paragraphs (20), (22), and (23), respectively; by inserting after paragraph

(18)the following: evaluate whether a small business concern presents a security risk for any reason, through measures including— the due diligence process required under subsection (vv); disclosures submitted under this subsection; or coordination with the intelligence community, as defined in section 3 of the National Security Act of 1947 ( 50 U.S.C. 3003 ), Federal law enforcement, and other counterintelligence capabilities of the Federal Government; ; in paragraph (20), as so redesignated— by striking subparagraph (B); by striking that— and all that follows through the small business concern submitting and inserting that the small business concern submitting ; by redesignating clauses (i), (ii), and

(iii)as subparagraphs (A), (B), and (C), respectively, and adjusting the margins accordingly; in subparagraph (B), as so redesignated, by striking or at the end; in subparagraph (C), as so redesignated, by striking and at the end; and by adding at the end the following: has a foreign risk connecting the small business concern to an entity, including any affiliates of the entity, or individual on— the UFLPA Entity List maintained by the Department of Homeland Security; the Non-SDN Chinese Military-Industrial Complex Companies List of the Office of Foreign Assets Control maintained by the Department of the Treasury; the Section 889 Prohibition List established under section 889 of the John S. McCain National Defense Authorization Act for Fiscal Year 2019 ( Public Law 115–232 ; 132 Stat. 1917) and maintained by the Department of Defense; the list of Chinese Military companies required under section 1260H of the William M.

(20)the following: provide for— a process under which, upon making an award decision to deny an application on the basis of a determination under paragraph (20), or upon making a determination under paragraph

(20)that a small business concern has a security risk described in that paragraph, the Federal agency provides to the small business concern, as appropriate pursuant to the discretion of the Federal agency and in a manner that does not compromise security, a notification— advising the small business concern of such determination; and identifying the basis for such determination; and a policy that clarifies that receipt of an award decision denying an application does not prohibit the small business concern from being eligible for an award in a subsequent award cycle; ; and in paragraph (23), as so redesignated— in subparagraph (B), by striking paragraph (20)(A) and inserting paragraph (22)(A) ; and in subparagraph (C), by striking paragraph (20)(B) and inserting paragraph (22)(B) ; and in subsection (vv)(2)— by amending subparagraph

(A)to read as follows: assess, using a risk-based approach as appropriate— the cybersecurity practices of a small business concern; patent analysis; employee analysis; foreign ownership of a small business concern seeking an award, including the financial ties and obligations (which shall include surety, equity, and debt obligations) of the small business concern and employees of the small business concern to a foreign country, foreign person, or foreign entity; foreign affiliations of a covered individual, owner, or other key personnel of a small business concern with an entity in a foreign country of concern; investment relationships of a small business concern with an individual or entity in a foreign country of concern; technology licensing agreements or joint ventures (including joint venture-like agreements) with an individual or entity in a foreign country of concern; and business relationships between a covered individual, owner, or other key personnel of a small business concern and an individual or entity in a foreign country of concern; ; in subparagraph (B), by striking the period at the end and inserting ; and ; and by adding at the end the following: examine any relationship of a small business concern seeking an award to any entity or individual included on the lists described in subsections (g)(16)(D) and (o)(20)(D). . Section 4(b)(4) of the SBIR and STTR Extension Act of 2022 ( Public Law 117–183 ; 136 Stat. 2183) is amended by striking 3 years and inserting 8 years .

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