Beginning with applications submitted for due dates on or after September 5, 2023, NIAID will require small business innovation research (SBIR) and small business technology transfer (STTR) applicants to provide a “Required Disclosures of Foreign Affiliations or Relationships to Foreign Countries” form before issuing a grant award. The disclosure form will allow NIH to better assess and mitigate risks to national security.
Before an Award Is Made
The form will be submitted as part of the Just-in-Time process, after an application has been peer reviewed and is within the range of possible funding—not at the time of initial application submission.
On the form, small business concerns (SBCs) will share the following information:
- The identity of all owners and covered individuals of the SBC who are a party to any malign foreign talent recruitment program.
- The existence of any parent company, joint venture, or subsidiary of the SBC that is based in or receives funding from, any foreign country of concern.
- Any current or pending contractual or financial obligation or other agreement specific to a business arrangement, or joint venture-like arrangement with an enterprise owned by a foreign state or any foreign entity.
- Whether the SBC is wholly owned in a foreign country.
- Any venture capital or institutional investment and if the investing entity has a general partner or any other individual holding a leadership role who has a foreign affiliation with any foreign country of concern.
- Any technology licensing or intellectual property sales or transfers to a foreign country of concern during the 5-year period preceding submission of the proposal.
- Any foreign business entity, offshore entity, or entity outside the United States related to the SBC.
- Any owners, officers, or covered individuals that have a foreign affiliation with a research institution located in a foreign country of concern.
- Information technology and information safeguarding plans.
Note that “covered individual” is defined as all senior key personnel that were identified by the SBC in its grant application.
The disclosure form pertains to both funded and unfunded relationships alike.
Foreign countries of concern include: the People’s Republic of China, the Democratic People’s Republic of North Korea, the Russian Federation, the Islamic Republic of Iran, or any other country determined to be a country of concern by the U.S. Secretary of State. The Small Business Administration will maintain an updated list of countries of concern at Required Disclosures of Foreign Affiliations or Relationships.
The new form supplements existing disclosure requirements for Other Support, rather than replaces them. You’ll recall, for Other Support, an applicant reports all resources made available to senior/key personnel in support of their research endeavors (with certain roles excluded). SBCs will submit the new disclosure form electronically using the Just-in-Time feature in eRA Commons.
During the Award Period
Recipient SBCs must submit an updated disclosure form to report any of the following throughout the duration of an award:
- Any change to a disclosure on the disclosure form.
- Any material misstatement that poses a risk to national security.
- Any change of ownership, change to entity structure, or other substantial change in circumstances that poses a risk to national security.
SBCs must submit an updated disclosure form within 30 days of any change in ownership, entity structure, covered individual, or other substantive changes in circumstance. Further, regular updates are required at the time of annual, interim, and final Research Performance Progress Report (RPPR) submission.
The Additional Materials tool in eRA Commons will facilitate SBC submission of updated disclosures.
Implications, Ramifications
These procedural changes are mandated by law, specifically the SBIR and STTR Extension Act of 2022.
Also by law, NIH, CDC, and FDA have established a Due Diligence Program to assess security risks posed by SBC applicants; specifically, the program will conduct cybersecurity assessments, patent analysis, employee analysis, and foreign ownership review of SBCs, including financial ties and obligations to foreign countries, persons, or entities.
Disclosing foreign relationships does not disqualify an SBC from grant award eligibility. Rather, the Due Diligence Program will determine whether foreign involvement may:
- Interfere with the capacity for activities to be carried out.
- Create duplication with activities.
- Present concerns about conflicts of interest.
- Violate federal law or agency terms and conditions.
- Pose a risk to national security.
Should a foreign relationship prompt any of the above concerns, then the Due Diligence Program will work with the SBC to resolve the risk. If a risk cannot be resolved, NIAID will not consider funding the award.
Lastly: If an SBC makes a material misstatement that poses a risk to national security (i.e., information in your disclosure form was substantially inaccurate) or undergoes a change in ownership, entity structure, or other substantial change that poses a risk to national security, NIAID may take noncompliance and enforcement actions to include required repayment of grant funds.
Read the June 12, 2023 Guide notice for complete details. Direct questions to NIH’s Small Business Education and Entrepreneurial Development (SEED) program at SEEDinfo@nih.gov.