The Small Business Innovation Research Program (SBIR), a critical funding mechanism for cutting-edge technologies developed by small businesses, was renewed just in time for another three years.

What are the SBIR Programs?

The highly competitive SBIR programs have been reauthorized for the past forty years and were designed to encourage engagement amongst domestic small businesses in Federal Research/Research and Development (R/R&D). The programs were designed to explore their technological potential while providing incentive to profit from commercialization and to stimulate innovation.

 Although overseen by the Small Business Administration, the SBIR and STTR Programs are affiliated with government agencies that are involved in research and development and have an extramural budget of $100 million dollars or more. According to, the SBIR and STTR Programs currently have 2.2 billion dollars set aside annually to support the financing of small business innovation. The program amounts to 3.2% of the extramural research budget for agencies with a budget greater than $100 million annually or an estimated 3.2 billion minimum (

 Proponents of the SBIR programs point to how it helps foster innovation and competitive advantage to justify the billions in investment capital made available by twelve participating agencies to small businesses. However, opponents suggest that the program has evolved to benefit a few and there are limited examples of intended success. Furthermore, opponents argue that inconsistent oversight has led it to be susceptible to foreign intervention, influence, and theft of intellectual property that was funded by the American people.

Congress Waited Until the Eleventh Hour on Reauthorization

Sunset provisions in the authorizing legislation were set to terminate the programs this year. Without an extension or new legislative vehicle, the program would have ceased at the end of fiscal year 2022.

Congressional committees debated the benefits and continuation of the program as well as the performance outcomes and risks. The topics debated include:

  • Concerns of “SBIR Mills,” which are organizations that have received multiple awards but have achieved few actual outcomes of operationalizing new innovations.
  • ‘Transition rates of turning funded R&D into applied technology that are able to be deployed’, were among the more intense questions for the program reauthorization discussions, with a particular focus on the frequency with which level I and II awarded projects transitioned to meet level III commercialization benchmarks.
  • The three largest beneficiaries of SBIR Funds are Colorado, Maryland and Virginia, which is not a surprise since the DoD grants the majority of SBIR awards (
  • Other than peaking in 2009 and 2010, the ratio of awards to awardees has remained constant at an average of about 2:1.

The SBIR program is very popular among DoD and other Federal agencies research programs, which led to a consideration of other legislative vehicles, such as a continuing resolution or other mechanisms that would ensure there would not be a gap in funding.

However, as of September 29, 2022, a deal was reached to fund the Small Business Administration’s SBIR and STTR programs through 2025. With a few days to spare, the House included SBIR in the FY 2023 National Defense Authorization Act (NDAA).

Here’s What was Added into SBIR 

In addition to greater restrictions on contract award and new oversight reporting requirements, among the negotiated elements designed to mitigate risk within the program include:

  • Mandatory disclosures of foreign affiliations. Awardees must now disclose “any technology licensing or intellectual property sales to a foreign country of concern, including the People’s Republic of China, during the 5-year period preceding submission of the proposal” This means there is an immediate requirement for due diligence and examining potential PRC affiliations for awards already made and is a new requirement for any future awards or transitions
  • Awarding agencies can deny awards to entities with ties to Chinese companies or to a firm that “has an owner or covered individual that is party to a malign foreign talent recruitment program.” This would make checking the veracity of individuals essential to retaining current awards and seeking new ones.
  • Awardees now have tighter benchmarks for transition and commercialization before they can apply for new Phase I or direct to Phase II awards.
  • To address concerns over “SBIR Mills” failure to meet benchmarks, there is a cap of 20 Phase I or Phase II awards per year.