Technology
Small Business Innovation and Economic Security Act
The law extends federal small-business innovation programs through 2031 while tightening security and expanding commercialization support.
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Small technology businesses retain access to SBIR and STTR funding, including a temporary pathway to awards of up to $30 million. Agencies also gain stronger tools to screen security risks and manage proposal volume.
What the law does
- Extends the SBIR and STTR programs through September 30, 2031.
- Requires reviews of applicants’ cybersecurity, foreign ties, ownership, investments, licensing arrangements, and connections to specified federal security lists.
- Allows agencies to deny awards for security risks without barring applicants from future award cycles.
- Creates strategic breakthrough awards of up to $30 million over 48 months, generally with prior Phase II experience and at least matching private funds.
- Caps each small business’s Phase I and Phase II proposal submissions beginning in fiscal year 2027, with limited urgent-topic waivers.
- Expands Phase III training, contracting help, award tracking, and technical and business assistance.
Who it affects
- Small businesses applying for or receiving SBIR and STTR awards.
- Federal agencies administering small-business research and technology funding.
- Department of Defense applicants subject to added readiness, transition, and matching-fund requirements.
Breakdown
Small Business Innovation and Economic Security Act
This law extends the federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs through September 30, 2031. It strengthens security screening, creates a temporary pathway for larger Phase II awards, limits proposal volume, improves support for commercialization, and expands program data collection and assistance.
Key takeaways
- Federal agencies must assess applicants for cybersecurity, foreign ownership, foreign ties, investment relationships, licensing arrangements, and connections to people or entities on specified federal security lists.
- Agencies may deny awards based on security risks, but may notify affected businesses of the reason when appropriate and must clarify that a denial does not prevent the business from applying in a later award cycle.
- Beginning in fiscal year 2026, qualifying agencies may use a limited share of SBIR funds for strategic breakthrough awards of up to $30 million over no more than 48 months, generally requiring prior Phase II experience and at least 100 percent matching funds.
- The strategic breakthrough award authority ends after September 30, 2031, and includes additional readiness, transition, and matching-fund requirements for Department of Defense awards.
- Beginning in fiscal year 2027, each agency must apply equal limits on how many Phase I and Phase II proposals a small business may submit, with narrowly limited waivers for urgent topics and required reports to Congress.
- The law expands Phase III training and contracting support, increases allowable technical and business assistance to $6,500 for Phase I and $50,000 for Phase II, improves award tracking, and extends related pilots and activities through September 30, 2031.