Good News for Small Businesses Seeking Public Research and Development Funding: SBIR/STTR Programs Extended to 2025

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Under the SBIR and STTR Extension Act of 2022 (the Act), signed into law last month, Small Business Innovation Research (SBIR) and technology transfer programs in Small Business (STTR) have been extended through fiscal year 2025. These programs provide grants or contracts. to small businesses to fund research and development at an early stage. More than a dozen agencies participate in SBIR or STTR programs, including the US Department of Defense, US Department of Energy and NASA. According to the Small Business Administration, more than 5,000 new awards, representing more than $3 billion, are granted each year through these programs. The full list and link to each agency’s website (including current opportunities) can be found here.

The SBIR and STTR programs (referred to as “America’s Seed Fund”) are similar but distinct programs. The goal of the SBIR program is innovation: to stimulate technological innovation and increase private sector commercialization of innovations resulting from federally funded research and development. The objective of the STTR program is technology transfer: to facilitate the transfer of technology developed by a research institute to a small entrepreneurial company. In order to receive a contract or award under either program, in general, applicants must be majority-owned and controlled by U.S. citizens or legal permanent residents, organized as a non-profit entity. profitable and have less than 500 employees.

In addition to extending the program through 2025, the law made significant changes to SBIR/STTR programs that impact both participants and agencies. These changes are consistent with the US policy objective of protecting intellectual property and limiting foreign influence/interference in domestic scientific and technological advances.

For example, the law requires agencies that participate in the SBIR/STTR program to implement due diligence programs to identify security risks presented by program participants. As part of the award review process, agencies must now specifically assess participants’ cybersecurity practices, employee makeup, patents, foreign ownership, or financial ties to any “foreign country of concern.”1 The law further creates limits on the award to companies with ties to a “foreign country of concern.” A “link” can come from foreign ownership (either individually or through venture capital investment), subsidiaries, joint ventures or contracts. It is also important to note that the law gives agencies the authority to reclaim funds from the SBIR/STTR scholarship when it is later determined that a recipient poses a risk to national security; for example, security risks resulting from a change in ownership.

SBIR/STTR programs present great opportunities for small businesses to obtain non-dilutive funding to support research and development of interest to participating agencies. However, applicants and participants should ensure that they understand these new requirements, in addition to the existing requirements regarding eligibility, performance and compliance as a government contractor. If you have any questions about the SBIR/STTR programs or any other government contracting issues, please contact Marc Fitzgerald, Mark BassWhere Seth Cowell.


[1] This list of countries includes China, North Korea, Russia, Iran, or any other country identified as a country of concern by the Secretary of State.

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