S3971-119

What This Bill Does

The Small Business Innovation and Economic Security Act reauthorizes SBIR and STTR programs through September 30, 2031 and adds new research-security, commercialization, procurement, and data-reporting rules. It requires federal agencies to evaluate SBIR and STTR applicants for security risks using due diligence, disclosures, intelligence-community coordination, law-enforcement input, listed-entity checks, and foreign-relationship analysis.

Who Benefits and How

Small businesses developing national-security or critical-technology products can benefit from a new strategic breakthrough allocation: eligible agencies may use up to 0.50 percent of their extramural R&D budgets for awards of up to $30 million over no more than 48 months, with streamlined proposal and contracting processes. SBIR/STTR award recipients also benefit from expanded technical and business assistance, cybersecurity help, foreign-involvement screening support, I-Corps participation options, and clearer Phase III training, model contracts, and data-rights guidance.

Who Bears the Burden and How

Small businesses with ties to listed entities, foreign countries of concern, foreign financing, foreign ownership, technology-licensing relationships, or classified security concerns face higher denial risk and more disclosure scrutiny. Federal SBIR/STTR agencies, SBA, GSA, DoD, Commerce, DHS, Treasury, FCC, CBP, and agency acquisition workforces bear new duties to screen applications, provide notices, brief Congress, set proposal limits, justify waivers, train contracting staff, update policy directives, report award classifications, and update procurement-data systems.

Key Provisions

• Expands SBIR/STTR security-risk screening to include listed-entity ties, classified sources, foreign ownership, foreign affiliations, investment relationships, technology licenses, joint ventures, and business relationships with countries of concern.
• Requires agencies to notify small businesses, when appropriate and without compromising security, about denial or security-risk determinations while preserving future eligibility.
• Creates strategic breakthrough Phase II awards of up to $30 million for small businesses with prior Phase II awards, 100 percent matching funds, market-validated technology, and, for DoD, acquisition-program commitments and at least 20 percent DoD matching funds.
• Requires annual proposal limits beginning in fiscal year 2027, permits urgent topic waivers for no more than 5 percent of topics, and requires waiver/reporting notices to congressional committees.
• Requires Phase III education for contracting officers and acquisition workforces covering Phase III agreements, data rights, and sole-source awards.
• Requires SBA and agencies to advocate for Phase III transitions, simplify procedures, create model contracts, and issue standardized Phase III eligibility clauses.
• Expands technical and business assistance to include cybersecurity, foreign-involvement screening, staff hiring or training, $6,500 Phase I support, $50,000 Phase II support, targeted reviews, and I-Corps participation.
• Adds SBIR/STTR award and contract designations to SBA and federal procurement data systems.
• Extends SBIR/STTR authorizations and related pilot authorities to 2031, adds Energy and NASA to covered activities, and repeals an older NDAA provision codified at 15 U.S.C. 638a.