Senate Strikes Deal to Restart SBIR/STTR After Five-Month Lapse
March 9, 2026 · 2 min read
David Almeida
The longest shutdown in SBIR/STTR history may finally be ending. Senators Edward Markey (D-MA) and Joni Ernst (R-IA) reached a bipartisan agreement in late February to restart the Small Business Innovation Research and Small Business Technology Transfer programs, which expired on October 1, 2025, and have been frozen since.
The bill — titled the Small Business Innovation and Economic Security Act — was hot-lined in the Senate, a procedural signal that leadership expects passage without objection. It would reauthorize all current SBIR/STTR programs and pilot authorities through September 30, 2031.
A New $30 Million Pathway Changes the Calculus
The most consequential provision is the Strategic Breakthrough Phase II pathway, which creates awards of up to $30 million with 48-month performance periods. The catch: applicants must hold a prior Phase II award and match 100% of the funding from private or non-SBIR sources. For DoD awards, at least 20% of matching funds must come from new non-SBIR defense dollars.
This pathway is capped at 0.5% of each agency's extramural R&D budget, meaning only a handful of awards per agency per year. But for companies with strong commercial traction and defense alignment, the scale is unprecedented.
Tighter Security, Stricter Proposal Limits
The bill also introduces per-agency caps on how many Phase I and Phase II proposals a single firm can submit annually — a direct response to concerns about serial applicants gaming the system. Waivers are limited to 5% of topics per fiscal year and require written justification from senior officials.
Security provisions expand significantly. Agencies must evaluate applicants for foreign ownership, financial ties to countries of concern, and cybersecurity practices. Denials based on security risk require formal notice but don't permanently bar future applications.
All software developed under SBIR/STTR awards will require open-source release under commercialization-friendly licenses, preferably Apache 2.0.
What Small Businesses Should Do Now
The bill hasn't reached the president's desk yet, but its Senate trajectory suggests passage within weeks. Small businesses should begin preparing security documentation — ownership disclosures, foreign financial relationships, and cybersecurity practices — now. Companies with Phase II history and access to matching capital should track the Strategic Breakthrough solicitations closely once agencies issue implementation guidance.
For help positioning your next SBIR proposal, Granted can match your technology to open solicitation topics and score your competitive fit before deadlines hit.