Scott Shane of Bloomberg Businessweek argues for limiting SBIR funds to US owned firms on the basis of congressional intent.  The key points of his article are:

• SBIR is an effective tool for overcoming the failure of the private sector to adequately fund early-stage technology commercialization.
• At issue is the proposed change that “domestic business concerns” be allowed to participate in the SBIR program.  By “domestic business concerns” the Small Business Administration means “significant contribution to the US economy through payment of taxes or use of American products, materials, or labor.”
• The use of “domestic business concerns” runs counter to congressional intent to “preserve and maintain the integrity of the SBIR program as a program for small business concerns in the United States by prohibiting large businesses or large entities or foreign-owned businesses or foreign-owned entities from participation in the program.”
• This is important because the SBIR program provides over $2 billion annually to support early-stage technology development and commercialization, without diluting the owner’s equity or needing to be paid back monetarily.  The owner’s are required to perform on the subsequent contract.
• Several economic arguments have been put forth that the author deems to be insufficient to justify limiting the SBIR program to US owned firms.
• The author concludes that complying with the congressional intent of prohibiting foreign-owned firms from participating should be sufficient to reject the proposed changes and limit participation to US owned firms.

The Bloomberg Businessweek Article