This summer we posted about the unfortunate circumstances some of our NIH applicants have had with failing to pass the foreign risk assessment. Several companies have had good fundable scores, gone through Just In Time paper work, and are on track for funding before they find out that their application and company have been flagged on the foreign risk assessment. All of the agencies carry out this assessment, but NIH seems to be the most restrictive. It has been frustrating for our companies with NIH in that there is no chance for discussion, remediation, or explanation; the application if summarily rejected for funding. NIH foreign risk reviewers are silent on why an application has been rejected, so it is difficult to impossible to determine what the issue is or how a company can address the problem.
At the SBIR/STTR Fall Innovation Conference, we had the opportunity to discuss this with SBA folks, but unfortunately, we don’t have a good solution to this company dilemma. Rather, it does seem that there is concern that the different agencies apply the rules differently, and that NIH is held as the gold standard. If we understand correctly, there is a governmental desire to not disclose why an application was rejected and we can infer that the other agencies might follow in NIH’s footsteps to summarily reject without review or explanation applications who have raised flags of foreign risk concern.
We do note, that SBA administrator Loeffler, in her keynote address, described the agency’s mission to drive small business success, get uncertainty out of the way, and streamline the path to company success. There is likely a fine balance between this SBA mission and the need to address foreign risk. Administrator Loeffler also described their “Red Tape Hotline” to which companies can call and report federal regulations that hurt their ability to grow, compete, or innovate.
