Congress must reauthorize and reform SBIR/STTR before it’s too late

Amid the current government shutdown, two critical programs expired: the Small Business Innovation Research and Small Business Technology Transfer programs. These initiatives drive American innovation and bolster our military’s technological edge. To maintain U.S. defense dominance and global leadership, Congress must act now – not merely by reauthorizing these programs, but by strategically reorienting them.

SBIR and STTR enable federal investment in small business-led research and development through a phased, competitive process. These relatively small investments have led to breakthrough technologies – from integrated networking chips in smartphones to advanced DNA identification systems, cutting-edge water filtration, and catalytic reactors.

To be clear, this doesn’t mean Congress should simply rubberstamp the status quo and reauthorize these programs as they are today. In order to remain agile and effective, these programs need a recalibration, one that strengthens national security, safeguards taxpayer-funded intellectual property from being lost to foreign competitors, fosters true innovation, and eliminates waste.

Stay in the know — Washington Technology’s Insider Membership gives you unmatched access to breaking news, in-depth analysis, and insights that federal contractors can’t afford to miss. Join today for 50% off.

In March 2025, Sen. Joni Ernst (R-Iowa) introduced the Investing in National Next-Generation Opportunities for Venture Acceleration and Technological Excellence (INNOVATE) Act to help usher in the “Golden Age of American innovation.” A long-time advocate of SBIR/STTR, Ernst is leading the charge to ensure its continued success, and startups are rallying behind her.

I recently had the privilege of joining the senator at the Center for Strategic and International Studies for a panel focused on SBIR reauthorization and reform. Her remarks mirrored what I’ve seen in the defense tech industry for decades: Smart investment in small innovators can help America bypass bureaucracy and outpace adversaries.

The INNOVATE Act aims to reinforce SBIR/STTR’s original mission, strengthen what works and scrap what doesn’t. It removes unnecessary barriers preventing new applicants from participating in SBIR and protects against China’s attempts to steal taxpayer-funded intellectual property.

It also eliminates financial incentives for so-called SBIR mills– companies that repeatedly take program money but don't deliver useful results.

Right on target, Ernst’s bill refocuses SBIR on its original charter: awarding merit-based contracts that strengthen America’s national defense. It’s an essential model for defense innovation – turning SBIR awards into new mission capabilities, accelerating their delivery and doing it with the urgency of a startup fighting for survival.

In addition to MetroStar, innovative SBIR/STTR recipients featured at CSIS – such as Simplesense, Shield Capital, and Vita Inclinata Technologies – are rapidly scaling effective enterprise capabilities through SBIR/STTR. They embody the promise of the SBIR/STTR programs: enabling lean, focused firms to deliver transformative solutions to national security challenges.

A lapse in SBIR/STTR reauthorization would set back innovation not by weeks, but by months or even years. The U.S. cannot afford to lose its competitive edge; delay is not an option.

Today, SBIR Phase III is one of the most efficient pathways for commercializing critical technologies. It bridges the gap between lab innovation and mission-ready capability. But to unlock the full potential of these programs, comprehensive modernization is essential.

Additionally, in order to preserve the integrity and intent of the program, America must prioritize better education for contracting officers and the standardization of SBIR marketplaces. These reforms are critical to deterring SBIR mills and preventing exploitation by foreign adversaries like China.

If the U.S. is serious about outpacing its adversaries and revitalizing the defense industrial base, SBIR/STTR must be revered not as traditional government programs, but rather as strategic accelerators of mission impact – converting innovation into real-world capability.

The stakes couldn’t be higher. Reauthorizing and modernizing the SBIR/STTR is not just about driving innovation at research facilities; it’s about ensuring our warfighters have the tools, technologies, and systems they need to defend the nation today and secure America’s future.

Ernst’s leadership on the INNOVATE Act offers a crucial opportunity to do just that. The U.S. can’t afford to miss it.

Ali Reza Manouchehri is the CEO and co-founder of MetroStar, an AI-enabled defense tech solutions provider based in Reston, Virginia.