Navy Centralizes SBIR Contracts to Speed Funding for Small Business

The U.S. Navy is overhauling its SBIR and STTR contracting infrastructure, consolidating dispersed contract execution into a centralized center of excellence designed to slash award timelines and push larger amounts of capital to small businesses faster.

Why the Navy Is Restructuring

Currently, 70% of the Department of the Navy's SBIR/STTR contract actions are executed from a single location, while the remaining 30% are scattered across multiple departments. Andrew Magliochetti, the Navy's director of small business programs, said consolidation will eliminate bottlenecks that have frustrated applicants for years.

"We are laser focused on the acceleration of developing capabilities and adoption," Magliochetti said. "For us to be able to more quickly move through the phases of the program, to award larger amounts of capital and getting those capabilities to the field and to the fleet quicker, we're all in support of that."

The overhaul comes as the SBIR/STTR reauthorization moves toward becoming law, with new Strategic Breakthrough Awards allowing agencies to fund individual companies up to $30 million.

$1.5 Billion in Phase III Demonstrates Scale

The Navy awarded $1.5 billion in Phase III obligations in 2024 across more than 150 programs—a figure that underscores why efficient contract execution matters. Phase III contracts, which transition SBIR innovations into acquisition programs, represent the critical bridge between prototype and production.

The Navy also launched "Navy Launch," a training program offering three tracks: commercialization techniques and investor funding models, acceleration with dedicated advisors, and sales strategy with fundraising preparation. The program reflects the Navy's broader push to help small businesses navigate the transition from research to defense contracts.

How Small Defense Tech Firms Should Prepare

The Navy plans to release detailed implementation guidance shortly after the reauthorization bill becomes law. Small businesses that have completed Phase II awards should begin identifying Phase III transition opportunities now, particularly in areas the Navy has flagged as priorities: autonomous systems, cybersecurity, and advanced manufacturing.

The center of excellence model could become a template for other defense agencies seeking to streamline their own SBIR programs. Track Navy SBIR opportunities at grantedai.com.

For in-depth SBIR strategy guides, visit the Granted blog.