Industry groups are urging congressional leaders to quickly reauthorize the federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, whose authority lapsed on Sept. 30, 2025.
In a Jan. 23 letter to House and Senate leadership, a coalition of industry associations warned that the lapse has frozen meaningful SBIR and STTR grant and contract funding, putting small businesses and agency innovation pipelines at risk. The letter was signed by the Aerospace Industries Association, the Commercial Space Federation, the National Defense Industrial Association, the Professional Services Council (PSC), and the U.S. Chamber of Commerce.
“The lapse of authorities for SBIR/STTR on September 30, 2025 — and the resulting halt to their meaningful grant and contract funding — further jeopardizes commercialization and scaling of cutting-edge technologies that are essential for U.S. leadership and preserving our asymmetric advantage,” the groups wrote.
“Without these programs, America risks losing ground in the global innovation race,” they added.
Since their inception, the programs have delivered over $77 billion in research and development funding to more than 33,000 small businesses nationwide.
The industry groups argue that a continued lapse in SBIR and STTR authority would destabilize small businesses and create “trickle-down impacts” throughout the aerospace, defense, and civilian ecosystems.
They also noted that the Pentagon issued guidance after the lapse that directed the department to “cease collecting or executing SBIR/STTR funds from research, development, test, and evaluation budgets until the program is reauthorized.”
According to that guidance from the Department of Defense (DOD) – which the Trump administration has rebranded to the Department of War – the lapse prevents the DOD from issuing new solicitations or obligating new funds, but it can continue using prior-year money for ongoing efforts and Phase III contracts that extend earlier projects.
The Defense Office for Small Business Innovation – which oversees the SBIR/STTR programs at the Pentagon – described the situation as “a pause, not a termination.”
The coalition cautioned that without timely reauthorization, agencies may divert billions intended for SBIR/STTR to other activities, compounding disruption to commercialization and scaling of critical technologies.
“SBIR and STTR help small businesses turn promising research into cutting-edge solutions for government agencies, from the Department of War to civilian agencies,” said PSC CEO Jim Carroll in a Jan. 26 press release. “Reauthorizing these programs will provide stability for innovators and guarantee the United States remains competitive in key technology areas in support of our nation’s economic and national security interests.”
“A continued lapse in SBIR and STTR authority will have consequences across the innovation ecosystem, as funding uncertainty forces small businesses to make difficult decisions about their workforce and future operations,” added PSC President Stephanie Sanok Kostro. “Reauthorization is urgently needed to ensure businesses can continue to provide innovative solutions across the full range of federal missions.”