SBIR/STTR Reauthorized Through 2031 With $30 Million Breakthrough Awards

After a six-month freeze that left roughly 6,000 small businesses in limbo, the SBIR and STTR programs are back—and they look markedly different. The Small Business Innovation and Economic Security Act (S. 3971) cleared the Senate unanimously on March 3 and passed the House 345–41, reauthorizing both programs through September 30, 2031.

What Changed in the New Reauthorization

The headline provision is the Strategic Breakthrough Award, which allows qualifying agencies to award up to $30 million to a single small business through one award or a series of milestone-based awards over a maximum 48-month performance period. Eligible agencies include the Department of Defense, Department of Energy, NASA, DHS, and EPA—any agency with an extramural research budget exceeding $100 million.

Companies pursuing these awards must hold at least one prior Phase II SBIR/STTR award and provide 100 percent private capital matching or equivalent non-SBIR government co-funding. It is a high bar, but for firms with proven Phase II track records, the payoff is transformative.

Standard Phase I awards now reach up to $314,000 for a 6-to-12-month feasibility study, while Phase II awards cap at $2 million over 24 months.

Proposal Caps and Security Vetting Take Effect in FY2027

Beginning in fiscal year 2027, every participating agency must establish a maximum number of proposals that any single company can submit per fiscal year. The provision directly targets so-called "SBIR mills"—firms that rely on high-volume submissions rather than deep technical innovation. Agencies retain waiver authority for time-sensitive topics, capped at 5 percent of agency topics annually.

National security vetting has also been tightened. Applicants will be screened against eight federal watchlists, including the Section 889 Prohibition List and Uyghur Forced Labor Prevention Act designations. Companies with connections to China, Russia, North Korea, or Iran face automatic disqualification.

How Small Businesses Should Prepare

Technical and business assistance funding has increased: Phase I awardees can now access up to $6,500 per project, and Phase II awardees up to $50,000, with cybersecurity assistance newly eligible.

The six-month authorization gap stalled an estimated $4 billion in annual funding, and the Navy alone had $1.5 billion in Phase III obligations frozen. With the programs reauthorized, grant seekers on grantedai.com can search open SBIR/STTR solicitations across all participating agencies. For a deeper look at how these changes reshape your next proposal, in-depth analysis is available on the Granted blog.