INNOVATE Act
Analysis under review: This bill has generated analysis that may be too generic or incomplete. Clause-level evidence remains available below.
Summary
What This Bill Does
The bill provides increases mandatory SBIR funding allocation to 3.45% and STTR allocation to 0.20% of agency R&D budgets starting FY2026, and requires DoD and NASA to focus STTR funds on early-stage research (TRL 1-3), creates Strategic Breakthrough Allocation allowing DoD to award up to $30 million to small businesses for mature technologies ready for defense acquisition, with 0.25% of extramural R&D budget dedicated to this program, and requires SBIR and STTR funding agreements to be firm-fixed-price contracts unless agency head makes written determination for alternative structure. It relies on compliance mandates, reporting requirements, appropriations, and exemptions. The main policy areas are Science & Space, Small Business, National Security, and Defense.
Who Benefits and How
Small technology businesses seeking federal R&D contracts could gain revenue opportunities, Small defense technology companies with mature products could gain revenue opportunities, and First-time SBIR applicant small businesses could face fewer barriers.
Who Bears the Burden and How
Small businesses with ties to foreign countries of concern could face higher barriers, Established SBIR recipients with over $75M in awards could face higher barriers, and Companies on government sanctions lists could face higher barriers.
Key Provisions
- Provides increases mandatory SBIR funding allocation to 3.45% and STTR allocation to 0.20% of agency R&D budgets starting FY2026, and requires DoD and NASA to focus STTR funds on early-stage research (TRL 1-3).
- Creates Strategic Breakthrough Allocation allowing DoD to award up to $30 million to small businesses for mature technologies ready for defense acquisition, with 0.25% of extramural R&D budget dedicated to this program.
- Requires SBIR and STTR funding agreements to be firm-fixed-price contracts unless agency head makes written determination for alternative structure.
- Exempts caps SBIR/STTR eligibility at $75 million in lifetime awards, limits concurrent PI proposals, caps Phase I applicant revenue at $40 million, and creates Phase 1A awards ($40,000 max) for first-time applicants.
- Requires replaces diversity-based outreach targeting women-owned and socially disadvantaged businesses with geographic-based targeting for emerging States and rural areas.
Evidence Chain:
This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.
At a Glance
What This Bill Does
The bill provides increases mandatory SBIR funding allocation to 3.45% and STTR allocation to 0.20% of agency R&D budgets starting FY2026, and requires DoD and NASA to focus STTR funds on early-stage research (TRL 1-3), creates Strategic Breakthrough Allocation allowing DoD to award up to $30 million to small businesses for mature technologies ready for defense acquisition, with 0.25% of extramural R&D budget dedicated to this program, and requires SBIR and STTR funding agreements to be firm-fixed-price contracts unless agency head makes written determination for alternative structure.
Key Policy Areas
Science & Space, Small Business, National Security, Defense
Primary Purpose
The bill provides increases mandatory SBIR funding allocation to 3.45% and STTR allocation to 0.20% of agency R&D budgets starting FY2026, and requires DoD and NASA to focus STTR funds on early-stage research (TRL 1-3), creates Strategic Breakthrough Allocation allowing DoD to award up to $30 million to small businesses for mature technologies ready for defense acquisition, with 0.25% of extramural R&D budget dedicated to this program, and requires SBIR and STTR funding agreements to be firm-fixed-price contracts unless agency head makes written determination for alternative structure.
Policy Domains
Title I - Improving Existing Programs
Identified Gains
- Small technology businesses seeking federal R&D contracts
- Small defense technology companies with mature products
- First-time SBIR applicant small businesses
- Mature small businesses with proven technologies
- Defense contractors developing dual-use technologies
Identified Costs
- Small businesses with ties to foreign countries of concern
- Established SBIR recipients with over $75M in awards
- Companies on government sanctions lists
- Companies heavily dependent on SBIR/STTR awards (SBIR mills)
- Companies connected to Chinese military-industrial entities
Sponsors
Legislative Progress
In CommitteeCommittee on Small Business and Entrepreneurship. Hearings held.
Ms. Ernst introduced the following bill; which was read twice …
Committee on Small Business and Entrepreneurship. Hearings held.
Read twice and referred to the Committee on Small Business …
Introduced in Senate
Stakeholder Effects
cui bono?How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.
Allied country companies (NATO, major non-NATO allies), Companies connected to Chinese military-industrial entities, Companies heavily dependent on SBIR/STTR awards (SBIR mills)
Positive-direction: Allied country companies (NATO, major non-NATO allies), Domestic-only technology companies, First-time SBIR applicant small businesses, Mature small businesses with proven technologies, New SBIR applicants (reduced competition), SBIR/STTR recipients with VC or PE investment, Small businesses in emerging States (25 states with fewest awards), Small businesses in rural areas, Small technology businesses seeking federal R&D contracts
Negative-direction: Companies connected to Chinese military-industrial entities, Companies heavily dependent on SBIR/STTR awards (SBIR mills), Companies on government sanctions lists, Companies with poor Phase I to Phase II conversion rates, Established SBIR recipients with over $75M in awards, Heavy SBIR recipients (over 25 Phase II awards), Large small businesses (over $40M revenue), Minority-owned small businesses, NASA STTR program participants, Researchers with foreign co-authorships in countries of concern, SBIR/STTR recipients seeking to license technology internationally, Small businesses receiving SBIR/STTR awards, Small businesses with ties to foreign countries of concern, Women-owned small businesses
Department of Defense acquisition programs, Federal agencies administering SBIR/STTR programs, Federal agencies with R&D budgets
Federal contracting officers faces effects in multiple directions
Positive-direction: Department of Defense acquisition programs, Federal agencies administering SBIR/STTR programs, NIH and DoD program managers, SBIR program oversight entities, US government (recovering misused funds)
Negative-direction: Federal agencies with R&D budgets, Federal agencies with SBIR/STTR programs, General Services Administration, Government Accountability Office, National security agencies and intelligence community
Small defense technology companies with mature products, US defense industrial base without foreign ties
Defense contractors developing dual-use technologies
Research institutions partnering with small businesses
Venture capital and private equity firms investing in SBIR companies
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
- "the_secretary"
- → Secretary of Defense (for DoD SBIR provisions)
- "federal_agencies"
- → Federal agencies with SBIR/STTR programs
- "the_administrator"
- → Administrator of the Small Business Administration
- "federal_agencies"
- → Federal agencies with SBIR/STTR programs
- "the_administrator"
- → Administrator of the Small Business Administration
- "federal_agencies"
- → Federal agencies with SBIR/STTR programs
- "inspector_general"
- → Inspector General of each agency
- "the_administrator"
- → Administrator of the Small Business Administration
- "comptroller_general"
- → Comptroller General (GAO)
- "director_nih"
- → Director of the National Institutes of Health
- "the_secretary"
- → Secretary of Defense
- "federal_agencies"
- → Federal agencies with SBIR/STTR programs
- "the_administrator"
- → Administrator of the Small Business Administration
Note: 'The Secretary' refers to Secretary of Defense in Title I (Sec. 102) but context varies by agency throughout the bill
Key Definitions
Terms defined in this bill
A required expenditure amount for the Department of Defense within the SBIR allocation of not less than 0.25 percent of the extramural budget for research or research and development designated for DoD
The 25 States with the fewest combined number of award recipients in the SBIR program and the STTR program that have received their first Phase I award in the previous 10 fiscal years
In the past 10 years, any foreign affiliation, technology licensing agreement, joint venture, contractual or financial obligation, investment agreement, research relationship, or business relationship between a small business concern and an individual, research institution, business entity, government, or government-owned entity in a foreign country of concern
A county or other political subdivision of a State that the Bureau of the Census has defined as mostly rural or completely rural in the most recent decennial census
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology