WASHINGTON, D.C. - The U.S. Senate Committee on Commerce, Science, and Transportation held a full committee hearing today on Waste, Fraud and Abuse in the Small Business Innovation Research (SBIR) Program.

 

Mr. Alfred J. Longhi, Jr., former Vice President for Sales and Marketing, Lithium Power Technologies

 

Mr. Thomas J. Howard, Acting Inspector General, National Aeronautics and Space Administration

 

Ms. Allison Lerner, Inspector General, National Science Foundation

 

Ms. Patricia A. Dalton, Managing Director, Natural Resources and Environment, Government Accountability Office

 

 

“I want to make it clear: I firmly believe that programs like SBIR are crucial to our country’s national security and our ability to compete in the global economy.  I support investing in basic research and working with the private sector to develop new technologies.  But here’s what I don’t support.  I don’t support handing over federal research dollars to businesses that have lied to the government about their qualifications or their research capabilities.  And I don’t support funding businesses that are willing to accept taxpayer dollars for research they haven’t actually done.” 

“My name is Alfred Longhi Jr, and I am the former Vice President of Lithium Power Technologies and a witness to SBIR Fraud. Due to being a father, husband, and patriotic citizen, I had no choice but to lead by example and reveal this fraud even though there may have been, and still be, severe consequences for my family. I began documenting fraud by my employer, reported it to the government and, at the government’s request, wore an undercover wire to record conversations. These actions and others, placed my family at physical and financial risk, but were necessary to reinforce the teachings to our children by my wife and I on love of country and always striving to ‘do the right thing.’”

“While SBIR plays an important role in NASA’s research activities, our work has identified instances of fraud, waste, and abuse by Program participants that bring into question the effectiveness of the Program’s internal controls. Specifically, of the SBIR 46 investigations we have closed since 2001, eight or 17 percent have resulted in criminal convictions, civil judgments, or administrative corrective action. Currently, we have five open investigations involving allegations of potential fraud, waste, or abuse in the SBIR Program.”

“NSF maintains comprehensive internal databases on its SBIR program from which NSF program officers and my office can easily obtain complete information about all SBIR proposals submitted to and awards issued by NSF. However, while we have full access to NSF SBIR proposal and award information, there is currently no convenient means for obtaining detailed information about SBIR proposals submitted to and awards received by companies from the other SBIR agencies. This lack of access presents a programmatic and investigative challenge to determining whether more than one federal agency has paid for the same research.”

“While the SBIR program is generally recognized as a successful program that has encouraged innovation and helped federal agencies achieve their R&D goals, it has continued to suffer from some long-standing evaluation and monitoring issues that are made more difficult because of a lack of accurate, reliable, and comprehensive information on SBIR applicants and awards. The Congress recognized the need for a comprehensive database in 2000 when it mandated that SBA develop a government-use database. Although SBA did not meet its statutorily mandated deadline of June 2001, the database has been operational since October 2008, and contains limited new information but may also contain inaccurate historical data.”

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