GAO Issues 14 Recommendations to Improve Small Business Data

By Marcus Bennett Detroit, MI · POLITICS DESK

Published Updated 3 min read

The Government Accountability Office issued 14 recommendations in 2026 to improve data reliability for small business research programs. These steps address reporting gaps after agencies awarded $4.

One goal of the programs is to increase commercialization of federally funded research and development. The Small Business Administration oversees these programs, including issuing guidance and reporting to Congress.

Not all federal agencies communicate reporting requirements to applicants or ensure that applicants submitted required reports. The Government Accountability Office reviewed awards issued in fiscal years 2019 through 2024 to assess these issues.

Why It Matters

The scale of federal investment in small business research is substantial, with billions of dollars awarded annually across multiple agencies. Reliable data on commercialization outcomes is necessary to determine whether these investments meet their statutory goal of translating federally funded research into marketable products and services.

Without accurate tracking, federal agencies cannot fully evaluate the success of the programs or identify areas where support may be lacking. The recommendations aim to close gaps that have persisted despite previous efforts to standardize reporting and definitions across the government.

Timeline

On October 1, 2022, Congress began requiring the Department of Defense to release open topic solicitations in fiscal year 2023. On October 1, 2024, in fiscal year 2024, 11 federal agencies issued $4.4 billion in Small Business Innovation Research and Small Business Technology Transfer awards. In 2026, the Government Accountability Office made 14 recommendations to improve data communication and reliability.

What's New

GAO’s 2014 report found that the Department of Defense (DOD) lacked comprehensive data on technology transitions from SBIR projects, citing inconsistent definitions and tracking challenges, a recurring issue in the 2026 report. The Small Business Administration (SBA) has been consistently late in submitting its annual reports on SBIR and STTR programs, with delays ranging from 6 to 16 months between fiscal years 2016 and 2021.

In 2022, the Department of Defense (DOD) issued guidance requiring its components to release at least one open topic solicitation per year starting in fiscal year 2023, but some components failed to clearly differentiate open topics from conventional ones in terms of specificity. The STTR Extension Act of 2022 mandated GAO to review open topics in SBIR/STTR programs, a task previously addressed in GAO’s 2022 analysis of topic labeling inconsistencies, establishing a precedent for the 2026 report.

How Sources Differ

Regarding the Small Business Administration, federalregister.gov states that the agency issued updated minimum performance standards for commercialization for firms receiving SBIR and STTR funding, requiring 25 Phase II awards during the five most recently completed fiscal years, excluding the current fiscal year. The Government Accountability Office report notes that the agency interviewed officials from the Small Business Administration and participating agencies, as well as representatives from 20 randomly selected small businesses that received awards.

Regarding small business awards, federalregister.gov details the new performance standards. Files.gao.gov reports that in fiscal year (FY) 2023, about 50 percent of all Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) program awards were from open topics—totaling about $2.2 billion—with the remaining awards from conventional topics.

Regarding the Small Business Administration's view on data, federalregister.gov notes the issuance of updated standards. Small Business Administration officials stated they would not view commercialization data as sufficiently reliable without validation and verification.

Regarding the Small Business Administration's reporting delays, federalregister.gov outlines the performance standards. Files.gao.gov notes that the Small Business Administration (SBA) has historically struggled with timely reporting, being between 6 to 16 months late with annual SBIR/STTR reports from FY 2016 to FY 2021, as noted in GAO-23-105591.

Regarding Small Business Administration requirements, federalregister.gov states the agency issued updated minimum performance standards. The Government Accountability Office report states that at specific milestones, small businesses are required to report to the Small Business Administration on commercial activity resulting from past awards.

fact_check Facts

Incomplete data prevent federal agencies from evaluating commercialization outcomes for Small Business Innovation Research and Small Business Technology Transfer awards.
Source: gao.gov
In fiscal year 2024, 11 federal agencies issued $4.4 billion in Small Business Innovation Research and Small Business Technology Transfer awards.
Source: gao.gov
The Government Accountability Office analyzed data for over 6,000 awards issued in fiscal year 2024.
Source: gao.gov
The Government Accountability Office made 14 recommendations to improve data communication and reliability.
The Government Accountability Office reviewed awards issued in fiscal years 2019 through 2024.
Source: gao.gov
Small Business Administration officials, officials
Small Business Administration officials identified options to increase data reliability, such as incorporating information from other sources like Internal Revenue Service revenue data or obtaining additional resources to validate the data.
Statutory changes would be needed to change the commercialization data the Small Business Administration collects.
The Government Accountability Office interviewed officials from the Small Business Administration and participating agencies, as well as representatives from 20 randomly selected small businesses that received Small Business Innovation Research or Small Business Technology Transfer awards.
Source: gao.gov

menu_bookBackground & Sources

Context and data our newsroom added to the originating report, with the primary source for each item shown below it.

The Small Business Administration oversees the Small Business Innovation Research and Small Business Technology Transfer programs, including issuing guidance and reporting to Congress.
For open topic awards, agencies define broad areas of interest and small businesses submit proposals defining potential agency needs and solutions.
For conventional topic awards, agencies define specific problems and small businesses submit proposals that address those needs.
One goal of the Small Business Innovation Research and Small Business Technology Transfer programs is to increase commercialization of federally funded research and development.
Source: gao.gov
Congress began requiring the Department of Defense to release open topic solicitations in fiscal year 2023.
At specific milestones, small businesses are required to report to the Small Business Administration on commercial activity resulting from past awards.
Source: gao.gov
The Small Business Administration maintains commercialization information in a statutorily required database.
The SBIR and STTR Extension Act of 2022 included a provision for the Government Accountability Office to review open topics in the programs.
The Small Business Administration issued updated minimum performance standards for commercialization for firms receiving SBIR and STTR funding, requiring 25 Phase II awards during the five most recently completed fiscal years, excluding the current fiscal year.
In fiscal year (FY) 2023, about 50 percent of all Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) program awards were from open topics—totaling about $2.2 billion—with the remaining awards from conventional topics.
Source: files.gao.gov
GAO’s 2014 report found that the Department of Defense (DOD) lacked comprehensive data on technology transitions from SBIR projects, citing inconsistent definitions and tracking challenges, a recurring issue highlighted in the 2026 report.
The Small Business Administration (SBA) has been consistently late in submitting its annual reports on SBIR and STTR programs, with delays ranging from 6 to 16 months between fiscal years 2016 and 2021.
The SBIR and STTR Extension Act of 2022 mandated that GAO review agencies’ use of open topics in SBIR and STTR solicitations, leading to multiple GAO reports on topic categorization and data reliability issues.
The Small Business Administration (SBA) has historically struggled with timely reporting, being between 6 to 16 months late with annual SBIR/STTR reports from FY 2016 to FY 2021, as noted in GAO-23-105591.

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