The U.S. Senate has unanimously approved reforms to the SBIR-STTR programs, led by Senator Joni Ernst, Chair of the Senate Committee on Small Business and Entrepreneurship. The changes are designed to ensure that small businesses receive greater support in federal research and development funding, address concerns about foreign influence, and increase accountability.
Senator Ernst highlighted issues with the current system, stating that it had "prioritized a few large companies over truly small businesses, wasted tax dollars that should be producing innovation for our national interests, and failed to protect taxpayer-funded technologies from foreign influence." She emphasized her commitment to prioritizing small businesses and working across party lines to implement these reforms.
"I will always fight to put small businesses first," said Ernst. "When confronted with the status quo of the SBIR program, I knew I could no longer let China win, allow waste to run rampant, fail our warfighters, or let large companies crowd out actual small businesses. After working across the aisle, these necessary reforms will strengthen the integrity of America’s seed fund while unlocking new innovation, and I look forward to working with this administration to make sure taxpayers’ investments are turned into a reality. Now, with these commonsense changes, America’s seed fund can serve our truly small businesses."
Key provisions in the legislation include stricter due diligence standards to guard against Chinese espionage; holding recipients accountable for developing advanced technologies for defense needs; imposing annual limits on applications from larger firms; introducing Strategic Breakthrough awards that require matching funds and agency support; and improving transparency through better data collection.
In remarks before passage of the bill, Ernst said: “I rise today as the Senate puts small businesses first in America’s innovation program and gives them the certainty they need to build and grow.
“For too long, our nation’s seed fund programs, SBIR and STTR, have been allowed to prioritize a few large companies over truly small businesses.
“Until now, these programs received blank checks to squander tax dollars meant to advance innovation in our national interest and have not protected taxpayer-funded technologies from foreign influence.
“When confronted with this unacceptable status quo, I knew Congress could work together to find a solution for our truly small businesses.
“After working across the aisle and with our small businesses, we now have the necessary reforms to strengthen America’s seed fund while unleashing small businesses to deliver for taxpayers and our warfighters.
“Together, our bipartisan, bicameral legislation will ensure awardees safeguard tech against Chinese espionage; hold recipients accountable to actually producing cutting-edge technologies and capabilities – no more blank checks; require for the first time an annual limit on applications to prioritize truly small businesses over large companies who know how to game the system; establish the first-of-its-kind strategic breakthrough awards; and finally provide taxpayers with transparency into who receives these awards.
“These changes were necessary and worth taking the time to absolutely get it right.
“And tonight, I am proud the Senate is unanimously passing these long-overdue updates for innovators.”
The Senate Small Business and Entrepreneurship Committee plays a key role in shaping national fiscal priorities by supporting informed decision-making within Congress (official website). The committee also provides comprehensive policy options related to federal budget components (official website) and contributes through resolutions as part of its involvement in congressional budget processes (official website). Established under the Congressional Budget and Impoundment Control Act of 1974 (official website), it delivers nonpartisan analysis via oversight of agencies such as the Congressional Budget Office (official website).
