SBIR/STTR Reauthorization: What’s at Stake and What Comes Next
The SBIR and STTR programs—which have fueled over $70 billion in small business–led R&D—are set to expire on September 30, 2025. Reauthorization is critical to maintain funding stability and support for innovation nationwide.
Two Bills Are in Play
Congress is considering two distinct legislative paths:
Senate & House SBIR/STTR Reauthorization Act of 2025
Introduced in the Senate as S.1573 and in the House as H.R.3169 on May 1, 2025
Download PDF
Key Reforms:
- Permanent authorization of both SBIR and STTR programs. Gradual increase in funding allocations—7% for SBIR and 1% for STTR over seven years (up from 3.2% and 0.45%)
- New roles like “Technology Commercialization Official” to bolster agency support.
- Continued foreign-due diligence until 2030.
- Expanded assistance programs—including FAST and internships—especially for underrepresented and emerging communities
INNOVATE Act (Sen. Ernst)
Introduced in March 2025, aims for a shorter reauthorization (through 2028)
Proposes nuanced adjustments:
- Increase SBIR allocation to 3.45%, reduce STTR to 0.20%.
- Introduce Phase IA awards ($40K) for new applicants.
- Establish Phase III defense-specific awards (up to $30 million).
- Place submission limits, introduce performance metrics, and refocus STTR partnership scope.
Where Things Stand
- Both bills have been referred to the Small Business Committees in their respective chambers
- Committees are acting quickly due to the looming September 30 deadline, aiming to pass a final, consolidated version
- Meanwhile, due to a federal Continuing Resolution, agency budgets remain level, ensuring no disruption in SBIR/STTR funding in the short term
Why This Matters
- A permanent authorization brings long-term predictability, encouraging broader participation and enabling agencies to better plan.
- Proposed funding increases allow agencies to support more projects and expand impact.
- New program elements (e.g., commercialization leadership, Phase IA/III awards) help strengthen commercial pathways and reduce market barriers.
- The debate between the bills reflects deeper policy priorities: bipartisan support for stability (Sen/Mrk/H.R.3169) vs. targeted reform and modernization (INNOVATE Act).
What’s Next
- Congressional committees are expected to negotiate a final text before September.
- Small businesses should monitor both bills and plan accordingly—particularly anticipating new program opportunities (e.g., Phase IA).
- Now is the time for public input: advocacy letters, stakeholder feedback, and contacting representatives can influence final reauthorization.
Bottom line: Both bills ensure the continuity of SBIR/STTR programs but diverge on structure and strategy. Congress is on a tight timeline to pass legislation before current authority lapses.
We will continue to update you on the status of the reauthorization throughout the coming months.
Anticipated Timeline to Reauthorization
| Date | Milestone |
|---|---|
| Now – August | Recess |
| Early September | Public comment, advocacy, and committee review Committees finalize reconciled language |
| Mid September | Floor votes anticipated in both chambers |
| By Sept. 30, 2025 | Final vote and presidential signature to avoid lapse |