NEWS | Congress Continues Support for Small Business, SBIR/STTR Program Reauthorizations and Grants

SBIR/STTR program reauthorizations and grants continue to remain critical to NSBA members and the small-business community for its place in developing crucial technology serving of American households.

30 JULY 2025 | This week, House Small Business Committee Chairman Roger Williams (R-Texas) introduced the INNOVATE ACT - legislation to reauthorize the SBIR/STTR program for three years.

This bill largely mirrors legislation of the same name introduced by Senate Small Business and Entrepreneurship Committee Chairwoman Joni Ernst (R-Iowa) in March, both representing a major overhaul of the SBIR/STTR programs.

Some of the major changes in the INNOVATE Act include:

• Removal of the commercialization benchmark (originally included in Chair Ernst’s version of the INNOVATE Act)

• Sec. 201 - Adding a national security waiver to the award cap for small businesses that have accumulated over $75 million of SBIR/STTR awards. This will be to have these businesses continue to participate in the program if their innovation is deemed vital to US national security.

• Sec. 203 - NewsGuard is prohibited from receiving funds.

• Sec. 204 - Connecting SBIR and STTR awardees to SBICs (small business investment companies).

• Sec. 205 - Agency outreach to rural communities.

• Sec. 301 - Requiring all agencies to have at least one open topic solicitation.

According to analysis from NSBA's Small Business Technology Council (SBTC), the INNOVATE Act also:

• Changes the STTR set aside from 0.45% to 0.2%, while repurposing the additional 0.25% for larger Phase III type awards called “strategic breakthrough”.

• Creates a pre-Phase I program called Phase IA, which gives awards up to $40,000 to firms new to the program.

• Limits principal investigators from working on more than one Phase I or II proposal at a time.

• Formalizes and makes more stringent the foreign risk section, prohibiting awards if it is determined that the firm has a foreign risk connected to any “subsidiaries, spinouts, and affiliates” for a 10 year period.

  
  

Text of the bill can be viewed here.

House and Senate Ranking Members Velazquez (D-N.Y.) and Markey (D-Mass.), respectively, released a separate SBIR reauthorization proposal earlier this year. There are several differences in the partisan bills; however, with only two months before the programs expire, Congressmen and Senators will face challenging negotiations with partisan hurdles standing in the way of a bill both sides would accept. 

Working an option to be added as an amendment to an active legislative package, Senate Chair Ernst signaled some intention to include her version of the INNOVATE ACT in the National Defense Authorization Act (NDAA), but there is little expectation for the NDAA to pass by September 30. Additionally, the House and Senate's Armed Services Committees typically do not accept partisan amendments to military funding package. 

A second option to include the INNOVATE ACT would be including the legislation as an amendment to a short-term continuing resolution (CR) funding package until a final, standalone bill can be negotiated.

With the expiration of these critical programs looming, NSBA urges small-business owners to contact Congress and share the importance of ensuring the future of SBIR/STTR.