ICYMI: Ernst Releases Alarming Report on Tech Vulnerable to China

WASHINGTON – In case you missed it, U.S. Senate Committee on Small Business and Entrepreneurship Chair Joni Ernst (R-Iowa) released a report revealing that billions of dollars in sensitive American intellectual property are vulnerable to China, because the lack of a consistent due diligence standard in the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs has left loopholes for America’s adversaries to exploit.

To safeguard the technology that supports our national security, Chair Ernst is fighting to pass her INNOVATE Act and asked Secretary of Defense Pete Hegseth to investigate and potentially halt all funding to six companies mentioned in the report with troubling ties to China that received nearly $180 million from 2023 to 2024 in SBIR-STTR funding after a due diligence vetting system had been implemented by the agency.

Here is some of the coverage of Ernst’s groundbreaking report:

Bloomberg | Senator Flags China Ties in Program to Aid Defense Startups

“The findings from Senator Joni Ernst add fuel to her campaign to overhaul the programs, which have awarded more than $75 billion since the first one began in 1982.”

Politico | GOP report finds small business innovation grants still carry foreign risk

“Senate Small Business Chair Joni Ernst (R-Iowa) released a report Wednesday that found that small business innovation program grant applicants flagged for foreign risk still received federal funding.”

National Review | Small Business Grants Across Federal Government Vulnerable to Chinese Influence, Report Finds

“Seeking to combat the problem, Ernst’s INNOVATE Act would clearly define “foreign risk” for due diligence reviews across agencies. The legislation would also create eligibility rules for applicants with foreign ties and codifies collaborations between agencies and the intelligence community on foreign risk reviews.”

Politico Morning Defense | Red SBIR?

“Congress previously rewrote SBIR and STTR rules to prevent funds from flowing to China after DOD discovered in 2021 that some SBIR awards had gone to companies linked to the Chinese military. The continued exploitation of the program, however, suggests that DOD may need to take further steps.”

Federal News Network | SBIR/STTR awards remain vulnerable to foreign influence

“Ernst’s investigation comes as Congress must reauthorize the SBIR/STTR programs. The 2022 update expires on Sept. 30. Ernst’s Innovate Act would extend the programs another three years to 2028 and continue to press agencies to address concerns over SBIR mills and foreign influence on awards.”

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