SBIR/STTR reauthorized

For more than six months, one of Washington’s main startup funding pipes had been shut off. The Small Business Innovation Research and Small Business Technology Transfer programs expired on September 30, 2025, and agencies stopped issuing new awards under them until Congress moved S. 3971. (sbir.gov, congress.gov) These programs are the federal government’s version of seed money for risky research. The Small Business Administration says they run across 11 participating agencies, and its training materials describe the combined annual budget as a little over $4 billion. (sbir.gov, sbir.gov, sbir.gov) The basic deal is simple: a small company gets paid to test an idea first, then build it out later. In the Small Business Technology Transfer program, that company must formally team up with a research institution, while the Small Business Innovation Research program does not always require that partner. (sbir.gov, sbir.gov) Congress restarted both programs through September 30, 2031. The Senate passed S. 3971 by voice vote on March 3, 2026, the House passed it 345 to 41 on March 17, 2026, and Congress.gov shows it was presented to the president on April 2, 2026. (congress.gov, iedconline.org) The bill is not just an extension. It also rewrites the security screen, telling agencies to deny awards when a company has certain foreign-risk ties, including links to entities on lists maintained by the Departments of Homeland Security, Treasury, Defense, and Commerce, plus the Federal Communications Commission and Customs and Border Protection. (congress.gov) The new part that defense startups will notice first is called a Strategic Breakthrough Award. The Congressional Research Service says it is an additional Phase II award of up to $30 million meant to help move a technology from the lab into the government acquisition process. (congress.gov, congress.gov) That matters because the old program often funded prototypes in chunks that were too small for the gap between “it works” and “someone will actually buy it.” The new law lets agencies carve out up to 0.50 percent of their Small Business Innovation Research allocation for these larger strategic breakthrough awards. (congress.gov, congress.gov) The award is built around milestones instead of a blank check. Congressional debate text for S. 3971 says the awards can run as long as 48 months, and the enrolled bill requires agencies to decide within 90 days after the solicitation closes. (congress.gov, congress.gov) The 90-day clock is aimed at one very specific Pentagon problem. The same congressional debate explains that companies trying to line up money in the Department of Defense planning cycle need decisions fast enough to make it into a Program Objective Memorandum, which is the Defense Department’s multi-year budget draft. (congress.gov, govinfo.gov) So this vote did two things at once. It turned the old funding spigot back on for the agencies that had been delaying solicitations, and it added a much bigger lane for companies that already cleared the science hurdle and now need enough money, and enough speed, to reach an actual procurement program. (sbir.gov, federalnewsnetwork.com, congress.gov)