H.R. 3169 — SBIR/STTR Reauthorization Act of 2025

This section permanently extends the Small Business Innovation Research (SBIR) program—under which federal agencies award grants to small businesses for high-risk R&D with commercialization potential—and the Small Business Technology Transfer (STTR) program—under which small businesses collaborate with research institutions on such R&D—indefinitely by striking their sunset provisions (from through FY2025).

This section increases the minimum percentage of participating agencies' extramural research and development budgets that must be awarded through the Small Business Innovation Research (SBIR) program—(1) to 4% in FY2026 and 2027 (from 3.2%), 5% in FY2028 and 2029, 6% in FY2030 and 2031, and 7% in FY2032 and each fiscal year thereafter (previously 3.2% in FY2017 through FY2025 and thereafter); and (2) to 0.5% in FY2026 and 2027 (from 0.45%), 0.65% in FY2028 and 2029, 0.8% in FY2030 and 2031, and 1% in FY2032 and each fiscal year thereafter through the Small Business Technology Transfer (STTR) program (previously 0.45% in FY2016 through FY2025 and thereafter). (The SBIR program reserves funds in agencies with extramural R&D budgets over $100 million for small businesses to perform federal R&D with commercialization potential; the STTR program, for agencies with budgets over $1 million, requires small business partnerships with research institutions such as universities.)

This section establishes fellowship and internship programs under both the Small Business Innovation Research (SBIR) program and Small Business Technology Transfer (STTR) program—by adding new paragraphs to subsections (f)(5) and (n)(4), respectively—authorizing federal agencies to provide grants or awards, directly or via third parties, to SBIR/STTR Phase II awardees for opportunities at undergraduate, baccalaureate, graduate, and postdoctoral levels in agency-priority fields. Agencies must conduct enhanced outreach to boost participation by women, socially disadvantaged individuals, and economically disadvantaged individuals; may partner with experienced nonprofits for such outreach; and may fund these activities using either funds authorized under subsection (mm) or up to 3% of their required SBIR/STTR expenditures under subsection (f)(1) or (n)(1). (SBIR and STTR provide competitive grants to small businesses for high-risk R&D with commercialization potential, with Phase II supporting prototype development.)

This section amends the Small Business Act to broaden participation in the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs—federal R&D grant programs requiring agencies to reserve portions of their extramural R&D budgets for competitive awards to small businesses—by (1) adding to the Small Business Administration (SBA) Administrator's duties under subsection (mm)(1) a requirement to provide small business concerns with application assistance for agency SBIR and STTR programs, including to implement directives increasing awards in historically low-award states; (2) requiring the SBA, not later than 90 days after enactment, to modify SBIR policy directives under subsection (j) for enhanced outreach to individuals conducting research at minority institutions (i.e., historically Black colleges and universities and other institutions serving underrepresented populations, as defined in 20 U.S.C. 1067k) and Hispanic-serving institutions (as defined in 20 U.S.C. 1101a(a)); and (3) requiring STTR policy directives under subsection (p)(2) to include procedures for such outreach.

This section revises technical and business assistance for recipients of Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) awards—competitive federal grants to small businesses for innovative R&D with commercialization potential—as follows: (1) requires federal agencies to authorize such recipients to select assistance (including newly specified cybersecurity assistance) via vendor lists, other vendors, staff hiring or training, or combinations; (2) authorizes Phase I recipients to use up to $6,500 per project and Phase II recipients to use up to $50,000 per project for such assistance, included in or added to the award as determined by the agency head; and (3) permits agencies to conduct targeted reviews of such funding. (Thus, the changes mandate agency authorization previously at agency discretion, expand provider options beyond federally selected vendors, and add staff-related uses.) This section further requires federal agencies required to expend SBIR or STTR funds on NSF's Innovation Corps (I-Corps) program as of January 1, 2025, to offer SBIR or STTR recipients an option to participate in I-Corps teams courses, bootcamps, or equivalent training using SBIR or STTR funds, I-Corps grants, or other sources.

This section requires the SBIR and STTR public websites (under 15 U.S.C. 638(g)(8) and (o)(9)) and interagency database (under 15 U.S.C. 638(k)) to disclose, for Phase I, Phase II, or Phase III awards (previously Phase I or II in specified provisions), information on each subcontracted research institution, including (1) its name and location; (2) whether it is an institution of higher education (IHE, as defined in 20 U.S.C. 1001), a nonprofit institution other than an IHE (as defined in 15 U.S.C. 3703), or a federally funded R&D center; and (3) for IHEs, whether it is a part B institution (i.e., historically Black college or university), Hispanic-serving institution, Tribal College or University, Alaska Native- or Native Hawaiian-serving institution, Predominantly Black Institution, Asian American and Native American Pacific Islander-serving institution, or Native American-serving nontribal institution (as defined in specified sections of the Higher Education Act of 1965). (As background, the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs award federal R&D grants to small businesses, with STTR requiring formal partnerships with research institutions such as universities.)

This section requires the Small Business Administration (SBA) Administrator, in coordination with the Secretary of Defense, General Services Administration (GSA) Administrator, and other appropriate agency heads, to establish training activities for federal contracting officers and agency acquisition workforce (i.e., employees with procurement responsibilities) on Phase III acquisitions under the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. (As background, SBIR and STTR provide federal R&D funding to small businesses across three phases, with Phase III enabling commercialization via non-SBIR/STTR funded sales to federal agencies, often through sole-source awards.) Training must cover (1) the programs' missions, goals, and authorities; (2) use of Phase III agreements; (3) Phase III data rights; and (4) execution of Phase III sole-source contracts. The section defines "agency acquisition workforce" and "Phase III acquisition" (i.e., purchase of a good or service from a Phase III participant seeking to commercialize it).

This section requires the head of each Federal agency required to conduct a Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) program—i.e., 11 agencies that collectively award over $4 billion annually in Phase I and II grants to small businesses for high-risk R&D with commercialization potential—to designate an existing official as the agency's Technology Commercialization Official (or identify an official with substantially similar duties). The official must (1) have commercialization experience and provide guidance to SBIR/STTR recipients on commercialization and technology transition; (2) coordinate with the Small Business Administration (SBA) Administrator and other agencies' officials to identify markets and pathways for promising technologies; (3) submit annual reports to the SBA Administrator on technologies advancing commercialization (including data required in new subsection (ccc)) and on actions and results to simplify, standardize, and expedite SBIR/STTR Phase III processes under subsection (hh); and (4) identify and advocate for technologies ready for Phase III awards or non-SBIR/STTR contracts. (Thus, the provision aims to accelerate small business technology commercialization across federal R&D programs.)

This section directs improvements to Phase III processes (i.e., commercialization phase without SBIR or STTR funding) in the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, which provide federal R&D funding to small businesses with potential for federal procurement. Specifically, it (1) requires Small Business Administration procurement center representatives to advocate for the maximum practicable transition of SBIR- or STTR-developed products, services, and technologies to Phase III awards for small businesses; (2) directs the SBA Administrator to modify relevant policy directives within one year of enactment; and (3) requires federal agencies to report on developing simplified, standardized procedures and model contracts for Phase I, II, and III SBIR awards and to issue standardized solicitation provisions and contract clauses clarifying information small businesses must provide for Phase III eligibility or market research.

This section extends through September 30, 2030 (from September 30, 2025), and increases from 3% to 3.3%, the portion of participating federal agencies' Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) extramural research budgets that may be used for administrative, oversight, and contract processing costs (i.e., program management activities such as solicitation coordination and applicant assistance). (1) requires the Department of Defense, Department of Energy, Department of Health and Human Services, National Aeronautics and Space Administration, and National Science Foundation to transfer not less than 10% of such funds to the Small Business Administration within two months of agencies' annual appropriations enactments to bolster SBIR and STTR administration (prohibiting use for Small Business Investment Company programs); and (2) authorizes use of these funds for outreach and technical assistance to implement SBIR/STTR policy directives and increase participation by states with historically low SBIR awards.

This section extends through 2030 (from 2025), and expands to all federal agencies required to conduct Small Business Innovation Research (SBIR) programs (from the National Institutes of Health, Department of Defense, and Department of Education), the authority to award direct-to-Phase II SBIR grants (i.e., Phase II awards without a preceding Phase I feasibility study for small businesses demonstrating prior R&D success). It also (1) limits such awards to no more than 10% of an agency's total annual SBIR funds (15% for NIH); and (2) requires agencies using this authority to report the number and amount of such awards in their annual SBIR reports to Congress under subsection (g)(9).

This section revises the Commercialization Readiness Program for civilian agencies under the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs—previously a pilot—by (1) revising the heading to "Civilian agencies commercialization readiness," (2) replacing each reference to "pilot program" with "covered program," and (3) extending the program through FY2030 (from FY2025). (The program assists SBIR/STTR Phase II awardees in accelerating the commercialization of technologies developed with federal research funding.)

This section extends authority for two Small Business Innovation Research (SBIR) pilot programs through September 30, 2030 (from September 30, 2025). (1) the Phase 0 Proof of Concept Partnership Program, which enables the Small Business Administration to partner with federal agencies, nonprofit organizations, and others to provide pre-Phase I assistance (e.g., market research and customer discovery) to SBIR and Small Business Technology Transfer (STTR) applicants; and (2) Commercialization Assistance Pilot Programs, under which SBIR agencies may allocate up to $15 million (or 3% of their SBIR Phase II budget, whichever is greater) annually for technical assistance to Phase II awardees to aid product commercialization.

This section revises annual reporting requirements under the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs by (1) in subsection (g)(9), adding the House Committee on Small Business and Senate Committee on Small Business and Entrepreneurship as recipients of SBIR reports and requiring agencies to publish such reports on their websites as soon as practicable; (2) in subsection (o)(10), making parallel changes for STTR reports; and (3) in subsection (gg)(6), requiring agencies to report to Congress.

This section directs the Comptroller General to submit to the Senate Committee on Small Business and Entrepreneurship and the House Committee on Small Business, not later than three years after enactment, a report assessing the effectiveness of the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs (i.e., competitive R&D grant programs for small businesses) with respect to participant diversification and commercialization. The report must include, to the extent practicable, assessments of (1) demographics of SBIR and STTR award recipients, including new entrants (i.e., small businesses without prior awards) and underrepresented groups (i.e., firms in low-award states, women-owned, and socially/economically disadvantaged-owned); (2) participating agencies' efforts to broaden participation of new entrants and underrepresented groups; (3) agency development of solicitation topics and applicant attraction; (4) agency efforts to support technology commercialization; (5) alignment of awards with agency research priorities and technology needs; and (6) other matters as determined by the Comptroller General in consultation with the committees.

This section amends SBIR and STTR award timeliness reporting requirements by (1) extending the required reporting period to 11 years (from 3 years) and (2) requiring annual reports to include, for each federal agency with an SBIR or STTR program, the average and median time to review proposals and make final award decisions. (SBIR and STTR programs provide competitive grants to small businesses for federal research, development, and technology transfer.)

This section establishes a pilot program at the National Institutes of Health (NIH) to accelerate award processes under its Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. (As background: SBIR and STTR provide grants to small businesses for high-risk R&D with commercial potential; NIH is a major participating agency.) The NIH Director must implement the program not later than one year after enactment by developing simplified, standardized procedures across awarding offices to reduce the time from award notice to funding release to 90 days; authorizing flexible peer review procedures (deemed to satisfy specified Public Health Service Act requirements); and terminating the program on September 30, 2030. This section also requires the NIH Director to submit an evaluation report on the pilot program—including its peer review procedures and effects on award times—to specified congressional committees not later than three years after enactment.

This section amends section 9(dd) of the Small Business Act to limit eligibility for Small Business Innovation Research (SBIR) program awards by small business concerns majority-owned by multiple venture capital operating companies, hedge funds, or private equity firms if the Small Business Administration Administrator determines the concern is, or is majority owned and controlled by, a covered foreign entity (with such determination considering direct or indirect subsidiary status of a foreign-owned firm). It also (1) requires the Administrator to establish size standards for such concerns seeking SBIR participation under this provision and (2) defines "covered foreign entity" to include foreign entities of concern (e.g., foreign terrorist organizations, specially designated nationals, entities owned by or subject to covered nations as defined in 10 U.S.C. 4872, or those involved in specified espionage, export control, or atomic energy violations), governments or political parties of foreign countries of concern, certain non-U.S. persons or entities, and their agents, subsidiaries, or controllers. The amendments apply only to SBIR awards made after enactment.

This section establishes a new annual commercialization impact assessment for the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs (i.e., competitive federal grants to small businesses for high-risk R&D with commercial potential), to be coordinated by the Small Business Administration (SBA) Administrator with heads of participating agencies. The assessment measures specified metrics over the preceding nine fiscal years for each small business concern that received at least 50 Phase II awards (i.e., development-phase grants) on or after October 1 of the ninth full fiscal year before the assessment fiscal year, including: (1) total dollar value of non-SBIR/STTR federal awards received; (2) total dollar value of SBIR/STTR Phase I and II awards received; (3) average annual gross revenue; (4) total revenue from sales or licensing of SBIR/STTR-derived products or services, disaggregated by source; (5) additional non-Phase I/II SBIR/STTR investments received; (6) mergers and acquisitions during or after Phase II awards; (7) new spin-out companies and third-party revenues from SBIR/STTR research; (8) year of first Phase II award and employee count at that time; (9) current employee count; and (10) total number and value of Phase III awards (i.e., commercialization-phase awards). The SBA Administrator must include a report on the findings in the annual SBIR/STTR report under subsection (b)(7) and submit it to the Senate Committee on Small Business and Entrepreneurship and the House Committees on Science, Space, and Technology and on Small Business.

This section includes small business investment companies (SBICs)—government-licensed entities that provide equity capital to small businesses—in the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs alongside private equity firms by (1) inserting "private equity firm, or SBIC investment" for each instance of "or private equity firm investment"; (2) inserting "private equity firms, or SBICs" for each instance of "or private equity firms"; (3) adding a definition of SBIC in subsection (e)(20) as a company defined in section 103 of the Small Business Investment Act of 1958 (15 U.S.C. 662); and (4) revising the heading of subsection (dd) to "Private Equity Firms, or SBICs." (Thus, SBIC-funded small businesses may participate in SBIR and STTR programs under the same ownership and investment criteria as those funded by private equity firms.)

This section revises headings in the Small Business Innovation Research (SBIR) program's Phase III awards provision (i.e., commercialization of SBIR-developed technologies, often via sole-source federal contracts) to specify "Sole Source and Other" justifications.