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What’s Going On:**
Starting September 30, 2025, the SBIR (Small Business Innovation Research) and STTR (Small Business Technology Transfer) programs will expire unless Congress steps in. These programs have fueled small-business-led innovation for over four decades; a lapse would freeze Phase I, II, and III awards delaying vital research, development, and product commercialization.
Two major bills are vying for adoption, and they offer very different paths forward:
1. INNOVATE Act (Sen. Joni Ernst / Rep. Roger Williams)
This proposal would renew the programs through 2028 and introduce several big changes:
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A Phase IA award of up to $40,000 for first-time applicants with a lightweight 2-page application.
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A cap of $75 million per firm lifetime in SBIR funding.
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A modest SBIR set-aside boost to 3.45% (from 3.25%), while slashing STTR to 0.2%
2. SBIR/STTR Reauthorization Act of 2025 (Sen. Markey / Rep. Velázquez)
This bill would make both programs permanent and greatly expand their impact:
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Gradually ramp funding to 7% for SBIR and 1% for STTR of extramural R&D budgets over seven years.
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Keep merit-based, no-cap award eligibility (no lifetime limits).
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Implement commercialization support via Technology Commercialization Officials, broaden application access with FAST partnerships, and strengthen foreign risk diligence
Why this matters now: If Congress doesn’t act soon, innovation pipelines get locked and that’s not a small disruption. The INNOVATE Act lowers the entry bar for newcomers but limits high achievers; the Markey/Velázquez plan offers stability, growth, and inclusivity with long-term structure.
Source: Federal News Network