Small Business Technology Transfer (STTR) Program

Small Business Technology Transfer (STTR) Program is sponsored by Multiple Federal Agencies (e.g., Department of Defense, Energy, Health and Human Services, EPA). The STTR program, similar to SBIR, supports innovative small businesses in technology research and development. It requires a partnership with a non-profit research institution.

The program aims to support socially/economically disadvantaged individuals.

Small Business Research Programs: SBIR and STTR - EveryCRSReport. com Internet Explorer version 8 or any modern web browser is required to use this website, sorry. Small Business Research Programs: SBIR and STTR Small Business Research Programs: The Small Business Innovation Research (SBIR) program was established in 1982 by the Small Business Innovation Development Act (P.

L. 97-219) to increase the participation of small innovative companies in federally funded research and development (R&D). The act requires federal agencies with extramural R&D budgets of $100 million or more to set aside a portion of these funds to finance an agency-run SBIR program.

As of 2021, 11 federal agencies operate SBIR programs. A complementary program, the Small Business Technology Transfer (STTR) program, was created by the Small Business Research and Development Enhancement Act of 1992 (P. L.

102-564) to facilitate the commercialization of university and federal R&D by small companies. Agencies with extramural R&D budgets of $1 billion or more are required to set aside a portion of these funds to finance an agency-run STTR program. As of 2021, five federal agencies operate STTR Both the SBIR and STTR programs have three phases.

Phase I funds feasibility-related R&D related to agency requirements. Phase II supports further R&D efforts initiated in Phase I that meet particular program needs and exhibit potential for commercial application. Phase III is focused on commercialization of the results of Phase I and Phase II grants; the SBIR and STTR programs do not provide funding in Phase III.

The SBIR and STTR programs have been extended and reauthorized several times since their initial enactments. On September 30, 2022, the authority for the programs, including existing pilot programs, was extended through 2025 by the SBIR and STTR Extension Act of 2022 (P. L.

117-183). Among its provisions, P. L.

117-183 included efforts to address research security concerns and the potential for malign foreign influence; increased performance standards for participation in the programs by multiple award recipients; required the Department of Defense (DOD) to create an open innovation topic for each DOD component solicitation; and directed the U.S. Government Accountability Office to conduct a number of studies, including a comparison of open and conventional topics; an examination of multiple award recipients; an analysis of subcontracting by SBIR and STTR awardees; and a report on best practices and the implementation of due diligence programs, required by the law, to assess potential security risks.

Through FY2019, the most recent year with published annual report data, federal agencies had made 178,731 awards totaling $54. 6 billion under the SBIR and STTR programs. In FY2019, agencies awarded $3.

3 billion in SBIR funding. DOD and the Department of Health and Human Services (HHS) accounted for more than three- fourths of SBIR funding in FY2019. While the majority of SBIR grants made in FY2019 were Phase I awards (65%), more than three-fourths (78%) of SBIR funding went to Phase II awards.

In FY2019, agencies awarded $429. 3 million in STTR funding. DOD and HHS accounted for more than three-fourths of STTR funding (82%).

Like the SBIR program, most STTR grants (73%) were for Phase I awards, while most funding (69%) went to In exercising its oversight of the SBIR and STTR programs, Congress has expressed continuing interest in the amount of agency funding set aside for the programs, the effectiveness of efforts seeking to improve commercialization outcomes, the share of awards and funding received by women-owned and minority and disadvantaged firms, the geographic distribution of awards and funding, and the Small Business Administration’s responsibilities under the programs, including agency coordination, policy guidance, and data collection.

Congressional Research Service link to page 5 link to page 6 link to page 7 link to page 7 link to page 8 link to page 8 link to page 8 link to page 9 link to page 9 link to page 10 link to page 11 link to page 16 link to page 16 link to page 18 link to page 18 link to page 18 link to page 19 link to page 19 link to page 19 link to page 20 link to page 25 link to page 25 link to page 26 link to page 28 link to page 28 link to page 30 link to page 32 link to page 34 link to page 35 link to page 36 link to page 37 link to page 37 link to page 38 link to page 38 link to page 39 link to page 6 link to page 11 link to page 12 link to page 12 link to page 13 link to page 14 Small Business Research Programs: SBIR and STTR Overview .........................................................................................................................................

1 Data Sources and Limitations .......................................................................................................... 2 Small Business Innovation Research ............................................................................................... 3 SBIR Overview .........................................................................................................................

3 SBIR Phases .............................................................................................................................. 4 Phase I ................................................................................................................................. 4 Phase II ...............................................................................................................................

4 Phase III .............................................................................................................................. 5 Technical Assistance ........................................................................................................... 5 SBIR Eligibility .........................................................................................................................

6 Recent and Historical SBIR Awards Data ................................................................................. 7 Small Business Technology Transfer ............................................................................................ 12 STTR Overview ......................................................................................................................

12 STTR Phases ........................................................................................................................... 14 Phase I ............................................................................................................................... 14 Phase II .............................................................................................................................

14 Phase III ............................................................................................................................ 15 Technical Assistance ......................................................................................................... 15 STTR Eligibility ......................................................................................................................

15 Recent and Historical STTR Awards Data .............................................................................. 16 Issues for Consideration ................................................................................................................ 21 Research Security ....................................................................................................................

21 Eligibility of Venture Capital-Backed Small Businesses ........................................................ 22 Improving Technology Commercialization and Trade-Offs Among Program Objectives ............................................................................................................................

24 Tracking Commercialization ............................................................................................. 26 Multiple Award Recipients and Role in Commercialization ............................................. 28 Fostering Diversity in Technological Innovation ....................................................................

30 Agency Compliance with Mandatory Minimum Expenditures .............................................. 31 Calculation of Extramural Research Funding and Set-Aside ........................................... 32 Enactment of Appropriations After Start of Fiscal Year ...................................................

33 Agency Views of Requirement to “Expend” Funds .......................................................... 33 SBA Delays in Meeting Statutory Reporting Requirements ................................................... 34 Concerns About Fraud, Waste, and Abuse ..............................................................................

34 Other Issues ............................................................................................................................. 35 Figure 1. SBIR and STTR Funding, FY2000-FY2019 ...................................................................

2 Figure 2. SBIR Phase I and Phase II Funding, FY2000-FY2019 .................................................... 7 Figure 3.

SBIR Funding by Agency, FY2019 ................................................................................. 8 Figure 4. Agency Allocation of SBIR Funding Between Phase I and Phase II, FY2019 ................

8 Figure 5. Share of Phase I and Phase II SBIR Funding, by Agency, FY2019 ................................. 9 Figure 6.

SBIR Aggregate Funding Level and Awards by State, FY2015-2019 ........................... 10 Congressional Research Service link to page 21 link to page 21 link to page 22 link to page 22 link to page 23 link to page 14 link to page 15 link to page 23 link to page 24 link to page 40 Small Business Research Programs: SBIR and STTR Figure 7. STTR Phase I and Phase II Funding, FY2000-FY2019 .................................................

17 Figure 8. STTR Funding by Agency, FY2019 ............................................................................... 17 Figure 9.

Agency Allocation of STTR Funding Between Phase I and Phase II, FY2019 ............. 18 Figure 10. Share of Phase I and Phase II STTR Funding, by Agency, FY2019 ............................

18 Figure 11. STTR Aggregate Funding Level and Awards by State, FY2015-2019 ........................ 19 Table 1.

Number and Amount of SBIR Awards by Agency, FY2019............................................ 10 Table 2. Number and Amount of SBIR Awards by Year, FY1983-FY2019 ...................................

11 Table 3. Number and Amount of STTR Awards by Agency, FY2019 ........................................... 19 Table 4.

Number and Amount of STTR Awards by Year, FY1994-FY2019 ................................. 20 Author Information ........................................................................................................................

36 Congressional Research Service link to page 6 Small Business Research Programs: SBIR and STTR Congress established the Small Business Innovation Research (SBIR) program in 1982 to expand the role of small businesses in federal research and development (R&D).

When establishing the program, Congress declared that technological innovation plays an important role in job creation, productivity improvements, and U.S. competitiveness; that small businesses are among the most cost-effective performers of R&D and particularly capable of bringing R&D results to market in the form of new products; and that, despite the role of small businesses as “the principal source of significant innovations in the Nation,” the vast majority of federally funded R&D is performed by large businesses, universities, and federal laboratories.

2 With this in mind, Congress established the SBIR program to advance four objectives:  to stimulate innovation,  to use small businesses to meet federal R&D needs,  to foster and encourage the participation of minority and disadvantaged persons in technological innovation, and  to increase private sector commercialization of innovations derived from federally In 1992, Congress established the Small Business Technology Transfer (STTR) program.

4 Similar in design to the SBIR program, STTR was created to facilitate the commercialization of university and federal R&D by small companies. Execution of the SBIR and STTR programs is decentralized. Both the SBIR and STTR statutes require that federal agencies with extramural R&D budgets in excess of specified amounts set aside a percentage of such funds to conduct their own SBIR and STTR programs.

5 Currently, 11 federal departments and agencies operate SBIR programs and 5 operate STTR programs. The Small Business Administration (SBA) helps to coordinate the SBIR and STTR programs, establishes overall policy guidance, reviews agencies’ progress, and reports annually to Congress on the operation of the programs.

Through FY2019, the most recent year with complete data, federal agencies had made 178,731 SBIR and STTR awards to small businesses to develop and commercialize innovative technologies. The total amount awarded was $54. 6 billi on.

Figure 1 shows SBIR and STTR funding for FY2000-FY2019. 1 This report is an update to a report that was originally authored by John F. Sargent Jr. 2 Small Business Innovation Development Act of 1982 (P.

L. 97-219). For further discussion of the role of small businesses in national economies see, Organisation for Economic Cooperation and Development, Small, Medium, Strong.

Trends in SME Performance and Business Conditions , OECD Publishing, Paris, May 15, 2017. 4 Small Business Research and Development Enhancement Act of 1992 (P. L.

102-564). 5 The percentages identified in law which must be set aside for SBIR and STTR are minimums; agencies may set aside more than these percentages. Federal R&D funding can be characterized as either extramural or intramural depending on the individuals and organizations performing the R&D.

Extramural R&D is performed by organizations outside the federal sector that perform R&D with federal funds under contract, grant, or cooperative agreement, including universities and colleges, industrial firms, federally funded research and development centers, state and local governments, and foreign performers. Intramural R&D is performed by employees of a federal agency in or through government-owned, government-operated facilities.

Congressional Research Service link to page 38 link to page 38 Small Business Research Programs: SBIR and STTR This report provides information on the legislative foundations, structure, operation, and current and historical funding levels of the SBIR and STTR programs; provides highlights of external reviews of the programs; and identifies and discusses selected policy issues. Figure 1.

SBIR and STTR Funding, FY2000-FY2019 Total of Phase I and Phase II Awards for SBIR and STTR programs Sources: CRS analysis of data.

Data for FY2000-FY2008 from SBA, Small Business Innovation Research Program (SBIR) Annual Report for each fiscal year; data for FY2009-FY2011 from SBA, The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Program Annual Report Fiscal Year 2009-2011 ; data for FY2012- FY2019 from SBA, Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs Annual Report for each fiscal year.

Annual reports available at https://www. sbir. gov/annual-reports-files.

Note: Source tables are not consistently labeled from year to year. Data Sources and Limitations This report uses the data reported to SBA and included in the required annual reports to Congress for the information and analysis presented below. The latest annual report data available to CRS is for FY2019.

While the SBA, through its SBIR. gov website, does makes available certain data on SBIR and STTR awards from the inception of the SBIR and STTR programs through the current fiscal year, the award database is considered “live data” and open for continuous revision throughout the year.

6 Additionally, as of the date of this report, the award database for FY2021 and FY2022 is incomplete (i.e., seven agencies have not posted data for FY2022). While the award database for FY2020 is complete (i.e., each of the agencies with SBIR and STTR programs has posted its data), SBA does not independently review such data for quality or accuracy until the data is used as part of the required annual report.

As of the date of this report, SBA has not completed the FY2020 annual report, however, SBA has indicated that “once the annual report is complete the number of changes to the award database are minimal. ”7 (See “SBA Delays in Meeting Statutory Reporting Requirements” herein for related discussion.) 6 U.S. Small Business Administration (SBA), “Awards Information,” at https://www.

sbir. gov/analytics-dashboard. Congressional Research Service link to page 28 link to page 28 Small Business Research Programs: SBIR and STTR Small Business Innovation Research The Small Business Innovation Research (SBIR) program was established under the Small Business Innovation Development Act of 1982 (P.

L. 97-219) and has subsequently been reauthorized or extended multiple times, most recently in 2016 when the program was extended through September 30, 2022. 8 Under the program, each federal agency with an extramural R&D budget greater than $100 million is required to allocate a portion of that funding to conduct a multi-phase R&D grant program for small businesses.

The objectives of the SBIR program include stimulating technological innovation, increasing the use of the small business community to meet federal R&D needs, fostering and encouraging participation in innovation and entrepreneurship by minorities and socially and economically disadvantaged individuals, and expanding private sector commercialization of innovations resulting from federally funded R&D.

Currently, 11 federal agencies participate in the SBIR program: the Departments of Agriculture (USDA), Commerce (DOC), Defense (DOD), Education (ED), Energy (DOE), Health and Human Services (HHS), Homeland Security (DHS), and Transportation (DOT); the Environmental Protection Agency (EPA); the National Aeronautics and Space Administration (NASA); and the National Science Foundation (NSF).

Each participating agency operates its own SBIR program under the provisions of the law and regulations, as well as with guidance issued by the U.S. Small Business Administration in its Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Program Policy Directive (referred to hereinafter as the Policy Directive ).

9 According to some analysts, this approach allows for general consistency across SBIR programs, while allowing each agency a substantial degree of control and flexibility in the execution of its program in alignment with its overall mission and priorities. 10 (See “Improving Technology Commercialization and Trade-Offs Among Program Objectives” herein for related discussion.)

In FY2017 and later years, federal agencies participating in the SBIR program are required to set aside at least 3. 2% of their extramural R&D funds for the SBIR program. In FY2019, the aggregate level of SBIR funding for all federal agencies was $3.

290 billion ($1. 719 billion for the 10 participating civilian agencies and $1. 572 billion for DOD).

The aggregate level of SBIR funding for the civilian agencies ($1. 719 billion) accounted for approximately 3. 27% of the participating agencies’ aggregate extramural R&D funding, as reported to SBA.

Overall, the civilian agencies participating in the SBIR program obligated the required 3. 2%; however, individually, 4 of the 10 civilian agencies failed to comply with the minimum spending requirement. Specifically, NASA, USDA, DOC, and EPA did not meet the SBIR spending requirement in FY2019, as assessed by SBA.

11 The percentage of SBIR funding set aside from 8 Section 1834 of the National Defense Authorization Act for Fiscal Year 2017 (P. L. 114-328).

9 The SBA directive is required under Section 9(j) of the Small Business Act (15 U.S.C. §638). SBA, Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Program Policy Directive , May 2, 2019.

10 See, for example, U.S. Government Accountability Office (GAO), Small Business Research Programs: Agencies Are Implementing New Fraud, Waste, and Abuse Requirements , GAO-13-70R, November 15, 2012, p. 1.

11 SBA determines compliance based on agency provided data and by assessing the agency provided data relative to extramural R/R&D obligations submitted to the National Science Foundation’s Survey of Federal Funds for Research and Development. As a result, may appear compliant based on agency submitted data, but is categorized as “Did Not Comply” based on SBA’s assessment.

SBA’s process for assessing compliance can be found in Section 7 of the Congressional Research Service link to page 35 Small Business Research Programs: SBIR and STTR DOD’s extramural R&D funds in FY2019 accounted for 3. 04% of DOD’s extramural R&D funding, as reported to SBA, below the required 3. 2%.

12 However, 4 of the 12 DOD components SBA collects data from did comply with the spending requirement—Navy, Defense Advanced Research Projects Agency (DARPA), Defense Threat Reduction Agency (DTRA), and Defense Logistics Agency (DLA) (See “Agency Compliance with Mandatory Minimum Expenditures” herein for related discussion.) The SBIR program is a three-phase program.

The purposes and parameters of each phase are In Phase I, an agency solicits contract proposals or grant applications to conduct feasibility- related experimental or theoretical research or research and development (R/R&D) related to agency requirements. The scope of the topic(s) in the solicitation may be broad or narrow, depending on the needs of the agency.

Phase I grants are intended to determine “the scientific and technical merit and feasibility of ideas that appear to have commercial potential. ”13 Generally, SBIR Phase I awards are not to exceed $150,000, adjusted for inflation, though the law provides agencies with the authority to issue awards that exceed this amount (the Phase I award guideline) by as much as 50%.

14 In addition, agencies may request a waiver from the SBA to exceed the award guideline by more than 50% for a specific topic. 15 In general, the period of performance for Phase I awards is up to six months, though agencies may allow for a longer performance period for a particular project.

Phase II grants are intended to further R/R&D efforts initiated in Phase I that meet particular program needs and that exhibit potential for commercial application. In general, only Phase I grant recipients are eligible for Phase II grants.

There are two exceptions to this guideline: (1) a federal agency may issue an SBIR Phase II award to a Small Business Technology Transfer (STTR) Phase I awardee to further develop the work performed under the STTR Phase I award;16 and (2) through FY2025, the National Institutes of Health (NIH), DOD, and ED are authorized to make Phase II grants to small businesses that did not receive Phase I awards.

Exercise of either of these exceptions requires a determination from the agency head that the small business has demonstrated the scientific and technical merit and feasibility of the ideas and that the ideas appear to have commercial potential. 17 12 SBA, Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Program Annual Report for Fiscal Year 2019 , pp. 34-44.

14 Ibid. §638(j)(2)(D) and (aa)(1). According to SBA, as of November 2021, agencies may issue a Phase I award up to $275,766 without seeking a waiver from SBA.

16 The STTR program is discussed in more detail later in this report.

17 SBA, Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Program Policy Congressional Research Service Small Business Research Programs: SBIR and STTR Phase II awards are to be based on the results achieved in Phase I (when applicable) and the scientific and technical merit and commercial potential of the project proposed in Phase II as evidenced by: the small business concern’s record of successfully commercializing SBIR or other research; the existence of second phase funding commitments from private sector or non-SBIR funding sources; the existence of third phase, follow-on commitments for the subject of the research; and the presence of other indicators of the commercial potential of the idea.

18 The Policy Directive generally limits SBIR Phase II awards to $1 million, adjusted for inflation, (the Phase II award guideline), though the directive provides agencies with the authority to issue an award that exceeds this amount by as much as 50%. As with Phase I grants, agencies may request a waiver from the SBA to exceed the Phase II award guideline by more than 50% for a specific topic.

19 In general, the period of performance for Phase II awards is not to exceed two years, though agencies may allow for a longer performance period for a particular project. Agencies may make a sequential Phase II award to continue the work of an initial Phase II award. The amount of a sequential Phase II award is subject to the same Phase II award guideline and agencies’ authority to exceed the guideline by up to 50%.

Thus, agencies may award up to $3 million, adjusted for inflation, in Phase II awards for a particular project to a single recipient at the agency’s discretion, and potentially more if the agency requests and receives a waiver from the SBA.

For sequential Phase II awards, some agencies require third party matching of the Phase III of the SBIR program is focused on the commercialization of results achieved with Phase I and Phase II SBIR funding. The SBIR program does not provide funding in Phase III. Phase III funding is expected, generally, to be generated in the private sector.

However, some agencies may use non-SBIR funds for Phase III funding to support additional R&D or contracts for products, processes, or services intended for use by the federal government.

In addition, the law directs agencies and prime contractors “to the greatest extent practicable,” to facilitate the commercialization of SBIR and STTR projects through the use of Phase III awards, including In addition to funding provided in Phases I-III, the law also allows agencies to award SBIR Phase I recipients up to $6,500 per year, and Phase II award recipients up to $50,000 per project, for technical and business assistance, in addition to the amount of the base award, or to provide such assistance through an agency-selected vendor.

21 This funding is intended to provide SBIR recipients with services such as access to a network of scientists and engineers engaged in a wide range of technologies; assistance with product sales, intellectual property protections, market research, market validation, and development of regulatory plans and manufacturing plans; or access to technical and business literature available through online databases.

These services are provided to help SBIR awardees make better technical decisions, solve technical problems, 18 15 U.S.C. §638(e)(4)(b).

19 According to SBA, as of November 2021, agencies may issue a Phase II award up to $1,838,436 without seeking a Congressional Research Service link to page 28 Small Business Research Programs: SBIR and STTR minimize technical risks, and develop and commercialize new commercial products and A small business’s eligibility for the SBIR program is contingent on its location, number of employees, ownership characteristics, and other factors.

Eligibility to participate in the SBIR program is limited to for-profit U.S. businesses with a location in the United States. Eligible companies must have 500 or fewer employees, including employees of affiliates.

The small (1) more than 50% directly owned and controlled by one or more citizens or permanent resident aliens of the United States, other small business concerns (each of which is more than 50% directly owned and controlled by individuals who are citizens or permanent resident aliens of the United States), an Indian tribe, Alaskan Native Corporation (ANC) or Native Hawaiian organization (NHO) (or a wholly owned business entity of such tribe, ANC or NHO), or any combination of these; or (2) more than 50% owned by multiple venture capital operating companies, hedge funds, private equity firms,23 or any combination of these, with no single such firm owning more than 50% of the small business;24 or (3) a joint venture in which each entity to the joint venture meets the requirements in paragraphs (1) and (2) above.

25 Agencies are restricted on how much of their SBIR funds they can make available for awards to small businesses that are more than 50% owned by venture capital operating companies, hedge funds, or private equity firms. The NIH, DOE, and NSF may award no more than 25% of their SBIR funds to such small businesses; all other SBIR agency programs are limited to using 15% of their SBIR funds for such awards.

26 Small businesses that have received multiple prior SBIR/STTR awards must meet certain bench- mark requirements for progress toward commercialization to be eligible for a new Phase I award (see “Improving Technology Commercialization and Trade-Offs Among Program Objectives” herein for related discussion).

For both Phase I and Phase II, the principal investigator’s primary employment must be with the small business applicant at the time of award and during the conduct of the proposed project. 27 23 See 13 C. F.

R. §121. 702.

24 According to SBA, “The exception to this is if the VC is itself more than 50% directly owned and controlled by one or more individuals who are citizens or permanent resident aliens of the United States. In such a case, that VC is allowed to have majority ownership and control of the awardee. In that case, the VC and the awardee, and all other affiliates, must have a total of 500 employees or less.

” Source: SBA, “Frequently Asked Questions: VC Participation,” accessed April 28, 2020, at http://sbir. gov/faq/vc-participation. 27 SBA, Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Program Policy Directive , May 2, 2019, p.

84. Congressional Research Service link to page 11 link to page 12 link to page 6 Small Business Research Programs: SBIR and STTR Generally, R/R&D work under an SBIR award must be performed in the United States, though agencies may allow a portion of the work to be performed or obtained outside of the United States under “rare and unique” circumstances.

28 Recent and Historical SBIR Awards Data29 In FY2019, the most recent year for which the SBA has published annual report data on SBIR awards, agencies made awards for $3. 290 billion, including 4,002 Phase I awards totaling $701. 5 million and 2,135 Phase II awards totaling $2.

493 billion. The success rate30 was 19% for Phase I SBIR proposers and 59% for Phase II proposers. While more than half of SBIR awards made in FY2019 were Phase I awards (65%), more than three-fourths of SBIR funding went to Phase II awards (78%).

31 Between FY2000 and FY2019, funding for Phase I remained relatively stable while Phase II funding generally increased. See Figure 2. SBIR Phase I and Phase II Funding, FY2000-FY2019 Sources: CRS analysis of data.

Data for FY2000-FY2008 from SBA, Small Business Innovation Research Program (SBIR) Annual Report for each fiscal year; data for FY2009-FY2011 from SBA, The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Program Annual Report Fiscal Year 2009-2011 ; data for FY2012- FY2019 from SBA, Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs Annual Report for each fiscal year.

Annual reports available at https://www. sbir. gov/annual-reports-files.

Note: Source tables are not consistently labeled from year to year. Two agencies accounted for more than three-fourths of total SBIR funding in FY2019: DOD ($1. 533 billion, 48%) and HHS ($988.

0 million, 31%). The next three highest SBIR funding agencies (DOE, NSF, and NASA) together accounted for almost 19%. The remaining agencies accounted for about 2%.

Se e Figure 3 . 29 See “Data Sources and Limitations” above. 30 The success rate is the number of successful proposals divided by total proposals submitted, expressed as a 31 Phase II funding includes original and subsequent Phase II award funding, as well as modifications.

Congressional Research Service link to page 12 link to page 13 Small Business Research Programs: SBIR and STTR Figure 3. SBIR Funding by Agency, FY2019 Source: CRS analysis of data from SBA, Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Program Annual Report Fiscal Year 2019 , Tables 2, 3, and 6. The allocation of SBIR funding between Phase I and Phase II awards varies among agencies.

Agencies that allocated the largest share of their SBIR funding to Phase I awards in FY2019 were EPA (42%), USDA (40%), and NSF (38%). Agencies that allocated the largest share of their SBIR funding to Phase II awards in FY2019 were DOT (100%),32 DOC (88%), and DOD (85%). Figure 4 illustrates each SBIR agency’s distribution of FY2018 SBIR funding between phases.

Figure 4. Agency Allocation of SBIR Funding Between Phase I and Phase II, FY2019 Source: CRS analysis of data from SBA, Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Program Annual Report Fiscal Year 2019 , Tables 2, 3, and 6. Agency shares of aggregate Phase I and Phase II SBIR funding are shown in Figure 5 .

The agencies with the highest share of total Phase I funding in FY2019 were HHS (40%), DOD 32 According to SBA, all Phase I awards associated with DOT’s FY2019 solicitation were made at the beginning of Congressional Research Service Small Business Research Programs: SBIR and STTR (32%), and DOE and NSF both at 10%. The agencies with the highest share of total Phase II funding in FY2019 were DOD (53%), HHS (28%), and DOE (8%). Figure 5.

Share of Phase I and Phase II SBIR Funding, by Agency, FY2019 Source: CRS analysis of data from SBA, Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Program Annual Report Fiscal Year 2019 , Tables 2, 3, and 6. In FY2019, women-owned small businesses received 456 Phase I awards (11% of all Phase I SBIR awards) totaling $86.

3 million (12% of total Phase I funding) and 214 Phase II SBIR awards (10%) totaling $289. 3 million (12%). 33 Socially and economically disadvantaged businesses received 315 Phase I awards (8% of all Phase I SBIR awards) totaling $49.

4 million (7% of total Phase I funding) and 120 Phase II SBIR awards (6%) totaling $117. 0 million (5%). 34 Companies in Historically Underutilized Business Zones (HUBZones) received 142 Phase I awards (4% of all Phase I awards) totaling $23.

6 million (3% of total Phase I funding) and 64 Phase II awards (3%) totaling $55. 7 million (2%). 35 Figure 6 shows the aggregate funding level and number of SBIR awards by state for FY2015- FY2019 (the latest five-year period for which