SBIR Program Update

SBIR/STTR Reauthorization Nears Completion

After several months of uncertainty, Congress is moving toward restoring the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. These programs, which collectively provide more than $4 billion annually in non-dilutive research and development funding to small businesses, expired on September 30, 2025, creating a temporary pause in new solicitations and awards while lawmakers debated reforms.

On March 3, 2026, the U.S. Senate unanimously passed the Small Business Innovation and Economic Security Act (S. 3971) that would reauthorize SBIR and STTR through September 30, 2031. This bill resulted from a compromise reached after months of negotiations within the Senate Small Business and Entrepreneurship Committee.

The legislation preserves the core structure of the SBIR/STTR programs while introducing several updates aimed at strengthening the programs and improving outcomes. Key updates include 1) enhanced foreign due diligence, 2) new limits on the number of applications companies can submit annually, 3) strategic breakthrough funding (SBF), 4) improvements to the TABA program, and 5) carryover funding from FY2026. These changes are intended to ensure the programs continue to prioritize truly small, innovative firms while protecting U.S. technological leadership.

SBIR/STTR Key Update #1: Foreign Due Diligence

The terms of S.3971 state center around countries of concern. If SBIR/STTR applicants a) have affiliation with, b) have received or will receive investment from, c) are licensing technology from or forming a joint venture with individuals from, or d) have some other business relationship with countries of concern, their proposals will certainly be scrutinized. In the worst case, their proposals might be rejected altogether. 

SBIR/STTR Key Update #2: Submission Limits

SBIR/STTR applicants may also need to limit how many Phase I and/or Phase II proposals they can submit, as each agency would determine that submission limit. Importantly, S.3971 maintains the merit-based competitive framework of the program and avoids proposed lifetime funding caps that many stakeholders argued could limit participation by experienced small businesses.

SBIR/STTR Key Update #3: Strategic Breakthrough Funding (SBF)

S.3971 includes the mention of strategic breakthrough funding (SBF). An SBF award is a $30M Phase II contract that SBIR/STTR applicants can potentially pursue. This large contract lasts for 4 years in contrast to “traditional” Phase II grants and contracts that provide around $600K-$2.8M over 2 years.

SBIR/STTR Key Update #4: Technical and Business Development Assistance (TABA) Program Changes

The fourth key SBIR/STTR update included in S.3971 proposes the addition and training of commercialization officers. In addition, TABA funding can potentially be available for Direct to Phase II and SBF awardees.

SBIR/STTR Key Update #5: FY2026 Funding Carryover

Finally, S.3971 allows agencies to carry over unused FY2026 SBIR/STTR funds so that funding not awarded during the lapse can still support new awards once the program resumes. 

The Senate-passed legislation now moves to the House of Representatives for final consideration. Because the House previously supported extending the programs, it is expected that the bill will quickly be signed into law. This progress signals that new solicitations and funding opportunities may resume after the recent pause, hopefully within the next couple of weeks. The anticipated multi-year extension would also provide greater stability for planning future proposals and long-term technology development efforts.