H.R. 5726 — DOD Entrepreneurial Innovation Act

This section establishes within the Department of Defense (DOD) a process for designating certain Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs—i.e., competitive R&D award programs that fund small businesses to develop innovative technologies with commercialization potential—as Entrepreneurial Innovation Projects. (As background, DOD is the largest federal participant in SBIR and STTR, which together award over $4 billion annually to small businesses.) Specifically, starting in the first fiscal year after enactment and each fiscal year thereafter, the Secretary of the Army, Secretary of the Navy, and Secretary of the Air Force (each a "Secretary concerned"), in consultation with the chief of each armed force under their jurisdiction, must designate not less than five eligible SBIR or STTR programs as such projects based on criteria including national security advancement, technological innovation, cost savings potential, advisory panel recommendations, and other factors determined appropriate; eligible programs must apply as specified by the relevant Secretary concerned. Designated programs receive the following benefits: (1) inclusion of estimated expenditures in the next future-years defense program submitted to Congress under 10 USC 221; (2) separate heading in programming proposals submitted to the Secretary of Defense; and (3) treatment as an integral component of DOD's planning, programming, budgeting, and execution (PPBE) process. (Thus, designations prioritize these small business R&D efforts in DOD multiyear budgeting and resource allocation.) Additionally, for each military department, the relevant Secretary concerned must establish an Entrepreneurial Innovation Advisory Panel—composed of three private-sector experts in entrepreneurial innovation, one Senior Executive Service acquisition workforce member, and one armed forces member appointed by the service chief—to annually recommend at least ten applicant programs for designation; panel members serve staggered terms of one to three years, with rotating chairs, conflict-of-interest mitigations, and compensation for non-federal members.