Golden Fleece Award

WASHINGTON, D.C.  — Rep. French Hill (AR-02) on Tuesday announced the Small Business Administration’s Office of Investment and Innovation as the latest recipient of his Golden Fleece Award due to the misuse of Small Business Innovation Research (SBIR) funding by repeat recipients, commonly referred to as “SBIR mills.”

The SBIR and Small Business Technology Transfer (STTR) programs are intended to help startups and small businesses develop innovative technologies and bring new products to market. However, recent analysis shows that a small number of companies receive a disproportionate share of funding, often without producing meaningful commercial outcomes. Over the lifetime of the SBIR and STTR programs, more than 180 organizations have received more than 100 awards, and six organizations have received over 1,000 awards.

Rep. Hill said, “Programs like SBIR are meant to support innovation and give small businesses a chance to succeed. But when a handful of companies repeatedly receive funding without delivering results or bringing products to market, it undermines the entire purpose of these programs. Every dollar that goes to one of these 'SBIR mills' is a dollar taken away from a startup or entrepreneur striving to make America stronger and more competitive, whether developing a new medical device or agricultural technology, or creating the next breakthrough in telecommunications or American manufacturing.”

Rep. Hill continued, "Like so many states across America, small businesses are the backbone of Arkansas's economy. When tax dollars are put toward programs to help small businesses and drive innovation, Arkansans, like all Americans, expect a return on their investment, not to see their money given to repeat players gaming the system and delivering nothing."

In his letter to SBA Associate Administrator, Mr. Joshua Carter, Rep. Hill writes:

Dear Mr. Carter,

I write today to inform you that the Small Business Administration Office of Investment and Innovation is this month’s recipient of my Golden Fleece Award. The Golden Fleece is being awarded due to the overuse of Small Business Innovation Research (SBIR) by a small number of companies.

Let me be clear, I strongly support the mission of the SBIR and Small Business Technology Transfer (STTR) programs. Congress created these programs to increase small business participation in federally funded research and development and to promote the commercialization of innovative technologies. These programs are critical to ensuring entrepreneurs and startups can compete and bring new products to market. That said, there is a longstanding issue within these programs that deserves urgent attention: the rise of “SBIR mills.”

Policy analysts, academic research, and Congressional oversight have all identified SBIR mills as organizations that specialize in securing large numbers of SBIR awards, while failing to translate those awards into meaningful commercial outcomes. SBIR mills repeatedly secure early-stage awards without bringing products to market.

A small number of companies receive a disproportionate share of SBIR funding. A Defense Innovation Board analysis found that the top 25 companies, representing less than 1 percent of participants, received roughly 18 percent of early-stage funding. Throughout the lifetime of the SBIR and STTR programs, over 180 organizations have received more than 100 awards through the program and six companies have received over one thousand awards.

This concentration of funding raises concerns that the program may not be reaching the broader pool of small, innovative businesses it was designed to support. Every dollar that goes to a company that is not bringing products to market is a dollar that is not going to a startup developing a new medical device, a new agricultural technology, or a new manufacturing process.

This issue has real consequences for everyday Americans. When a small group of repeat players captures a disproportionate share of SBIR funding, fewer resources are available to true startups and first-time entrepreneurs who are trying to turn new ideas into businesses. For a state like Arkansas, where small businesses and startups are a key driver of economic growth, this means fewer opportunities for local innovators to access capital, grow their companies, and create jobs in their communities.

The existence of SBIR mills undermines the intent of the SBIR and STTR programs. Federal research funding is meant to seed innovation, expand participation, and help small businesses transition and succeed. When a small group of organizations captures a disproportionate share of awards without delivering commercialization results, it risks crowding out new program entrants and reducing the overall effectiveness of the programs.

The Small Business Administration plays a central role in coordinating these programs and ensuring they operate consistently with Congressional intent. As such, it is critical that the Administration take additional steps to ensure that SBIR and STTR awards are distributed in ways that promote innovation, accountability, and measurable outcomes.

I remain committed to supporting these programs and ensuring their long-term success. However, long-term success includes restoring confidence that taxpayer dollars are being used effectively and that these programs are supporting the next generation of American innovators, rather than sustaining a cycle of repeated awards without results.

Should you require additional authority from Congress to strengthen oversight or improve program integrity, I stand ready to work with you to ensure these programs meet their full potential.