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Small Business Technology Transfer (STTR) Program is sponsored by Various Federal Agencies (e.g., DoD, NIH, NSF, DOE, NASA). The STTR program is similar to SBIR but requires a formal collaboration between the small business and a non-profit research institution (such as a university or federal lab).
It expands funding opportunities in the federal innovation research and development arena and aims to foster technology transfer through cooperative R&D.
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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. 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.")
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 funded R&D.
3 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 billion. **Figure 1** shows SBIR and STTR funding for FY2000-FY2019. 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.
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congress. gov/crs-product/R43695)Figure 1. SBIR and STTR Funding, FY2000-FY2019 Total of Phase I and Phase II Awards for SBIR and STTR programs **Source****s****:**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_ _) P_ _rogram_ _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. [](https://www. congress.
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congress. gov/crs-product/R43695)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, \"Awards Information,\" at https://www.
sbir. gov/analytics-dashboard .") 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.) [](https://www.
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congress. gov/crs-product/R43695)Small Business Innovation Research [](https://www. congress.
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gov/crs-product/R43695)SBIR Overview 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 Techno_ _logy_ _Transfer (STTR) Program Policy Directive_ (referred to hereinafter as the _Policy Directive_). 9 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 .") 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, Small Business Research Programs: Agencies Are Implementing New Fraud, Waste, and Abuse Requirements , GAO-13-70R, November 15, 2012, p. 1.") (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 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 and Small Business Technology Transfer (STTR) Program Annual Report for Fiscal Year 2019 , pp. 34-44.") 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.)
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congress. gov/crs-product/R43695)SBIR Phases The SBIR program is a three-phase program. The purposes and parameters of each phase are discussed below.
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gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)Phase I 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(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.")
In addition, agencies may request a waiver from the SBA to exceed the award guideline by more than 50% for a specific topic. 15(4).") 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.
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gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)Phase II 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 and Small Business Technology Transfer (STTR) Program Policy Directive , May 2, 2019 .")
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(4)(b).") 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 agency's SBIR funds. [](https://www.
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congress. gov/crs-product/R43695)Phase III 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 sole source awards. 20(4).") [](https://www.
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congress. gov/crs-product/R43695)Technical Assistance 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, minimize technical risks, and develop and commercialize new commercial products and processes. 22(1).") [](https://www.
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congress. gov/crs-product/R43695)SBIR Eligibility 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 business must be (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 and Small Business Technology Transfer (STTR) Program Policy Directive , May 2, 2019, p. 84 .")
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 [](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)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**. [](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)Figure 2. SBIR Phase I and Phase II Funding, FY2000-FY2019 **Source****s****:**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%.
See **Figure 3**. [](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)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 F_ _iscal_ _Y_ _ear_ _201_ _9_, 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.
[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)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 201_ _9_, 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%), 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%).
[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)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 201_ _9_, 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%). [](https://www.
congress. gov/crs-product/R43695)34 and Small Business Technology Transfer (STTR) Program Policy Directive , May 2, 2019, p. 66 .")
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 annual report award data by state are available). Although every state and territory except American Samoa received awards during this period, SBIR funding was concentrated among certain states.
The two states that received the largest number and amount of SBIR awards during this period—California (5,274 awards totaling $2. 767 billion) and Massachusetts (2,692 awards totaling $1. 515 billion)—accounted for 32% of the total number of SBIR awards and 33% of the total funding for this period.
The top ten states—California, Massachusetts, Virginia, Maryland, Colorado, New York, Pennsylvania, Texas, Ohio, and North Carolina—accounted for more than two-thirds of SBIR awards and funding. This concentration is similar to overall federal R&D funding for FY2019.
Eight of the top ten states in SBIR funding are also among the top ten states in overall federal R&D funding in FY2019 (which accounted for 61% of total federal R&D funding).
36 In contrast, the ten states with the fewest number of SBIR awards and lowest aggregate award amounts—American Samoa, Marshall Islands, Alaska, North Dakota, Mississippi, Puerto Rico, Idaho, South Dakota, Wyoming, and West Virginia—accounted for less than 1% of awards and total funding during this period.
The ten states with the least amount of federal R&D funding in FY2019 (six of which are among the bottom ten states in SBIR funding) also accounted for less than 1% of total federal R&D funding. 37 [](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)Figure 6.
SBIR Aggregate Funding Level and Awards by State, FY2015-2019 **Source:**CRS analysis of data from SBA, _Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs Annual Report_ for each fiscal year (FY2015-FY2019), "SBIR/STTR Awards by U.S. State and Territory" Table. Annual reports available at https://www. sbir.
gov/annual-reports-files. **Table 1** provides information on overall agency SBIR obligations for FY2019, as well as the number and aggregate amounts of Phase I and Phase II SBIR awards. [](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)Table 1.
Number and Amount of SBIR Awards by Agency, FY2019 Department/Agency Total Awarded, Phase I and Phase II**a,b**Number of Awards Total Awarded**b**Number of Awards Total Awarded**b** Department of Agriculture$21. 0 79$8. 5 26$12.
5 Department of Commerce$9. 9 12$1. 2 24$8.
7 Department of Defense$1,532. 5 1,916$223. 2 1178$1,309.
3 Department of Education$10. 2 15$3. 0 8$7.
2 Department of Energy$262. 2 363$68. 3 178$194.
0 Dept. of Health and Human Services$988. 0 948$283.
3 426$704. 7 Department of Homeland Security$21. 2 24$3.
6 19$17. 7 Department of Transportation c$11. 1 0$0.
0 14$11. 1 Environmental Protection Agency$5. 5 23$2.
3 9$3. 2 Nat'l Aeronautics and Space Admin. $151.
4 313$38. 7 141$112. 7 National Science Foundation$181.
2 309$69. 4 112$111. 7 [](https://www.
congress. gov/crs-product/R43695)**Total, All Agencies**a**$3,194. 2****4,002****$701.
5****2,135****$2,492. 7** **Source:**CRS analysis of data from SBA, _Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Program Annual Report Fiscal Year 201_ _9_, Tables 2, 3, and 6. [](https://www.
congress. gov/crs-product/R43695)**Notes:** a. Components many not sum to totals due to rounding.
b. Amounts include obligations for new awards in FY2019 and FY2019 obligations on prior year awards. c.
All Phase I awards associated with DOT's FY2019 solicitation were made at the beginning of FY2020. As a result, the number of awards and total obligations are reported as zero. The resulting awards and obligations will be reported within the FY2020 report.
**Table 2** provides historical data on the number and amount of Phase I and Phase II SBIR awards from the program's inception through FY2019. [](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)Table 2. Number and Amount of SBIR Awards by Year, FY1983-FY2019 Fiscal Year Total Amounts Awarded (in millions)Number of Awards FY1984$108. 4 999 338 1,337 FY1985$199.
1 1,397 407 1,804 FY1986$297. 9 1,945 564 2,509 FY1987$350. 5 2,189 768 2,957 FY1988$389.
1 2,013 711 2,724 FY1989$431. 9 2,137 749 2,886 FY1990$459. 9 2,346 837 3,183 FY1991$463.
7 2,553 788 3,341 FY1992$499. 1 2,559 916 3,475 FY1993$644. 7 2,898 1,141 4,039 FY1994$694.
0 3,102 928 4,030 FY1995$834. 1 3,085 1,263 4,348 FY1996$874. 7 2,841 1,191 4,032 FY1997$1,066.
8 3,371 1,404 4,775 FY1998$1,066. 7 3,022 1,320 4,342 FY1999$1,096. 5 3,334 1,256 4,590 FY2000$1,190.
2 3,166 1,330 4,496 FY2001$1,294. 4 3,215 1,533 4,748 FY2002$1,434. 8 4,243 1,577 5,820 FY2003$1,670.
1 4,465 1,759 6,224 FY2004$1,867. 4 4,638 2,013 6,651 FY2005$1,865. 9 4,300 1,871 6,171 FY2006$1,883.
2 3,836 2,026 5,862 FY2007$1,644. 8 3,814 1,542 5,356 FY2008$1,783. 7 3,626 1,771 5,397 FY2009$1,965.
1 4,007 1,793 5,800 FY2010$2,011. 1 4,045 1,846 5,891 FY2011$2,221. 7 3,739 1,759 5,498 FY2012$1,955.
6 3,528 1,982 5,510 FY2013$2,075. 7 3,011 1,474 4,485 FY2014$2,238. 3 3,162 1,513 4,675 FY2015$2,188.
7 2,870 1,454 4,324 FY2016$2,279. 7 2,909 1,592 4,501 FY2017$2,571. 6 3,223 1,871 5,094 FY2018$2,742.
4 3,135 3,135 1,703 1,703 4,838 4,838 FY2019[](https://www. congress. gov/crs-product/R43695#_Ref395875311)a$3,194.
2 4,002 2,135 6,137 **Source****s****:** Data for FY1983-FY1989 from SBA, _The Small Business Economy: A Report to the President_, 2010, Table 1. 16, pp.
51-52; Data for FY1990-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.
**Notes:** Source tables are not consistently labeled from year to year. a. [](https://www.
congress. gov/crs-product/R43695)All Phase I awards associated with DOT's FY2019 solicitation were made at the beginning of FY2020. As a result, the number of awards and total obligations are reported as zero.
The resulting awards and obligations will be reported within the FY2020 report. [](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)Small Business Technology Transfer [](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)STTR Overview The Small Business Technology Transfer program was created by the Small Business Research and Development Enhancement Act of 1992 (P.
L. 102-564) and has been reauthorized several times, most recently in 2016 when the program was extended through September 30, 2022. 38.")
Modeled largely after the SBIR program, the STTR program seeks to facilitate the commercialization of university and federal R&D by small companies. Under the program, each federal agency with an extramural R&D budget of $1 billion or more is required to allocate a portion of its R&D funding to conduct a multi-phase R&D grant program for small businesses.
The STTR program provides funding for research proposals that are developed and executed cooperatively between a small firm and a scientist in an eligible research institution39 A non-profit institution as defined in section 4(3) of the Stevenson-Wydler Technology Innovation Act of 1980 (that is, an organization th...") and that are aligned with the mission requirements of the federal funding agency.
Currently, five agencies participate in the STTR program: DOD, DOE, HHS, NASA, and NSF. In FY2016 and later years, federal agencies participating in the STTR program are required to set aside at least 0. 45% in funding for the program.
In FY2019, total STTR award funding among all participating federal agencies was $429. 3 million ($221. 6 million for the four participating civilian agencies and $207.
6 million for DOD). The aggregate level of STTR funding for the civilian agencies accounted for 0. 44% of the participating agencies' aggregate extramural R&D funding, as reported to SBA.
Specifically, HHS and NASA complied with the minimum spending requirement of 0. 45%, while the DOE and NSF failed to comply. The percentage of STTR funding set aside from DOD's extramural R&D funds was 0.
40%, as reported to SBA, also below minimum spending requirement. However, 4 of the 12 DOD components SBA collects data from did comply with the spending requirement—Navy, DARPA, SOCOM, and DLA.
The SBA emphasizes three principal differences between the STTR and SBIR programs: * Under STTR, the small business and its partnering research institution must establish an intellectual property agreement detailing the allocation of intellectual property rights and rights to carry out follow-on research, development, or commercialization activities.
* Under STTR, the small business partner must perform at least 40% of the R&D, and the research institution partner must perform at least 30% of the R&D. * The STTR program does not require the principal investigator to be primarily employed by the small business, a requirement of the SBIR program. 40 and Small Business Technology Transfer (STTR) Program Policy Directive , May 2, 2019, pp.
83-84, 100-101, 107-109 .") As with the SBIR program, each participating agency operates its own STTR program under the provisions of the law and regulations, as well as with guidance issued by the SBA in its _Policy Directive_.
According to some analysts, this approach allows for general consistency across STTR 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. 41 (See "Improving Technology Commercialization and Trade-Offs Among Program Objectives" herein for related discussion.) [](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
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gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
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congress. gov/crs-product/R43695)STTR Phases Like the SBIR program, the STTR program has three phases. The purposes and parameters of each phase are discussed below.
[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)Phase I 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 the proposed effort and the quality of performance of the [small business] with a relatively small agency investment before consideration of further Federal support in Phase II."
42 and Small Business Technology Transfer (STTR) Program Policy Directive , May 2, 2019, p. 68.") Generally, STTR Phase I awards are limited to the same award guideline amount as SBIR Phase I awards (see "SBIR Phases" above).
Similar to SBIR Phase I awards, agencies may issue STTR Phase I awards that exceed the guideline amount by as much as 50% and may request a waiver from the SBA to exceed the award guideline by more than 50% for a specific topic. 43 In general, the period of performance for Phase I awards is not to exceed one year, though agencies may allow for a longer performance period for a particular project. [](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
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gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)[](https://www. congress.
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gov/crs-product/R43695)[](https://www. congress. gov/crs-product/R43695)[](https://www.
congress. gov/crs-product/R43695)Phase II 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.
44 Awards are to be based on the results achieved in Phase I and the scientific and technical merit and commercial potential of the project proposed in Phase II. The _Policy Directive_ generally limits STTR Phase II awards to $1 million, adjusted for inflation (the Phase II award guideline).
As with Phase I grants, agencies may issue awards that exceed this guideline by as much as 50% and may request a waiver from the SBA to exceed the guideline by more than 50% for a specific topic. 45 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. This sequential Phase II award is also subject to the Phase II award guideline amount and agencies' authority to exceed the guideline by
Scoring criteria used to review proposals for this grant.
According to the current listing, eligibility includes: For-profit small businesses located in the U.S., with 500 or fewer employees, and at least 51% owned and controlled by U.S. citizens or permanent resident aliens. Requires a formal collaboration with a U.S. research institution, with the small business performing at least 40% of the work and the research institution performing at least 30%. Confirm the full requirements in the official notice before applying.
The current listing shows phase I: $50,000 - $275,000 (typically); Phase II: $750,000 - $1,500,000 (typically). Verify award ceilings, matching requirements, and allowable costs in the official notice.
Small Business Technology Transfer (STTR) Program is funded by Various Federal Agencies (e.g., DoD, NIH, NSF, DOE, NASA). Verify program details on the funder's official page before applying.
Yes — this listing is flagged as national in scope, so applicants across the U.S. may apply, subject to the sponsor's other eligibility criteria.
Applications go through the funder's official portal — the Apply Now link on this page goes there directly.
Past winners and funding trends for this program
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