The Small Business Innovation Research Program (SBIR) and the Small Business Technology Transfer Program (STTR) expired at midnight after Congress failed to reauthorize them – a casualty of the broader shutdown fight.
The programs have delivered over $77 billion in research and development (R&D) funding to more than 33,000 small businesses nationwide, helping drive technological breakthroughs.
Sen. Ed Markey, D-Mass., introduced a bill in May in an effort to permanently authorize the SBIR and STTR programs before their expiration on Sept. 30, 2025.
Earlier this month, the House of Representatives passed a one-year extension for the two programs. However, the Senate failed to pass an extension before last night’s deadline.
“Our standing on the world stage of innovation depends on our small businesses. A lapse in the SBIR/STTR programs will be devastating – it will lead to expansive layoffs, setbacks to scientific advancement, leave government funded technology vulnerable to foreign adversaries, and cut billions for small business investors,” Markey said in a statement on Tuesday.
“By allowing this program to end, the Chair and my Senate Republican colleagues are serving up our crown jewel – American small businesses and decades of American innovation – to our foreign adversaries on a silver platter,” he added.
Markey, who serves as the ranking member of the Senate Committee on Small Business and Entrepreneurship, released an analysis earlier this month on how the program lapses would harm small businesses.
In it, he explains that the cancellation of mid-stage projects would cause “dozens of agencies and hundreds of small businesses to lose hundreds of millions – if not more – spent on unfinished” R&D.
For example, his analysis warns that for the Department of Defense alone, over $1.6 billion in investments in warfighter capability technology “would be lost or delayed.” Additionally, over 10,000 small businesses would lose their contracts with the department, “causing access to essential military technology to be lost or delayed.”
House lawmakers also voiced their concerns on Tuesday evening, warning of the implications of allowing the two programs to expire.
“We are disappointed that the Senate failed to extend the SBIR and STTR programs,” said House Committee on Small Business Chairman Roger Williams, R-Texas, Ranking Member Nydia M. Velázquez, D-N.Y., House Science, Space, and Technology Committee Chairman Brian Babin, R-Texas, and Ranking Member Zoe Lofgren, D-Calif., in a statement.
“For more than forty years, these initiatives have kept small businesses at the forefront of innovation, strengthened our national defense, and delivered immense returns for taxpayers. A lapse creates uncertainty for innovators and risks slowing progress at a time when global competition is intensifying,” they said, adding, “Research could be delayed, innovation diminished, and America’s competitive edge on the world stage eroded.”
As Congress works to find a path forward, Eric Blatt, the executive director of The Alliance for Commercial Technology in Government and partner at Scale LLP, encouraged lawmakers to reauthorize and reform the programs.
“The SBIR program is a lifeline for startups with breakthrough technologies, and it has spurred a new wave of defense innovation, attracting thousands of mission-driven founders and billions of dollars of private investment,” Blatt told MeriTalk.
“We urge Congress to find common ground, and to reauthorize the program with reform as swiftly as possible,” he added.