Small Business Innovation Research

The Small Business Innovation Research (or SBIR) program is a U.S. government funding program, coordinated by the Small Business Administration, intended to help certain small businesses conduct research and development (R&D). Funding takes the form of contracts or grants. The recipient projects must have the potential for commercialization and must meet specific U.S. government R&D needs.

Funds are obtained by allocating a certain percentage of the total extramural (R&D) budgets of the 11 federal agencies with extramural research budgets in excess of $100 million. Approximately $2.5 billion is awarded through this program each year. The United States Department of Defense (DoD) is the largest agency in this program with approximately $1 billion in SBIR grants annually. Over half the awards from the DoD are to firms with fewer than 25 people and a third to firms of fewer than 10. A fifth are minority or women-owned businesses. Historically a quarter of the companies receiving grants are receiving them for the first time.

In April 2021, the DoD reported on a lack of due diligence for SBIR recipients, which permitted funds to go toward companies linked to the People's Liberation Army. In 2022, the program was reauthorized with additional disclosure requirements for companies that have ties to "any foreign country of concern, including the People’s Republic of China.”

Participating agencies
Each Federal agency with an extramural budget for R&D in excess of $100,000,000 must participate in the SBIR Program and reserve at least 3.2% of such budget in fiscal year 2017 and each fiscal year after. A Federal agency may exceed these minimum percentages. In 2010, the SBIR program across 11 federal agencies provided over $2 Billion in grants and contracts to small U.S. businesses for research in innovation leading to commercialization.

, SBIR programs are in place at the following agencies:
 * Department of Agriculture (National Institute of Food and Agriculture)
 * Department of Commerce
 * National Institute of Standards and Technology
 * National Oceanic and Atmospheric Administration
 * Department of Defense (divided into 13 components)
 * Department of the Army
 * Department of the Navy
 * Department of the Air Force
 * Chemical and Biological Defense
 * Defense Advanced Research Projects Agency
 * Defense Health Agency
 * Defense Logistics Agency
 * Defense Microelectronics Activity
 * Defense Threat Reduction Agency
 * Missile Defense Agency
 * National Geospatial-Intelligence Agency
 * Office of the Secretary of Defense
 * Special Operations Command
 * Department of Education (Institute of Education Sciences)
 * Department of Energy
 * Department of Health and Human Services (National Institutes of Health, Centers for Disease Control and Prevention, Food and Drug Administration)
 * Department of Homeland Security (Science and Technology Directorate, Domestic Nuclear Detection Office)
 * Department of Transportation
 * Environmental Protection Agency
 * National Aeronautics and Space Administration
 * National Science Foundation

Related programs
A similar program, the Small Business Technology Transfer Program (STTR), uses a similar approach to the SBIR program to expand public/private sector partnerships between small businesses and nonprofit U.S. research institutions. The main difference between the SBIR and STTR programs is that the STTR program requires the company to have a partnering research institution which must be awarded a minimum of 30% of the total grant funds. As of 2014 federal agencies with external R&D budgets over $1 billion were required to fund STTR programs using an annual set-aside of 0.40%.

The Small Business Technology Council, a member council of the National Small Business Association, hands out the Tibbetts Award annually "to small firms, projects, organizations and individuals judged to exemplify the very best in SBIR achievement."

Federal and State (FAST) is a program of State-based business mentoring and assistance to aid small businesses in the preparation of SBIR proposals and management of the contracts.

History
The program was established with the enactment into law of the Small Business Innovation Development Act in 1982 to award federal research grants to small businesses. The SBIR program has four original objectives: to stimulate technological innovation; to use small business to meet Federal research and development needs;  to foster and encourage  participation by minority and disadvantaged persons in technological innovation; and to increase private sector  commercialization innovations derived from Federal research and development.

The program must be periodically reauthorized by the United States Congress, but reauthorization is generally included in each new budget. The program was re-authorized through FY2017 by the 2012 Defense Authorization Act (P.L.112-81).

Rep. Kim Young (R-CA) and Angie Craig (D-MN) introduced the SCORE for Small Business Act of 2022 to reauthorize the SBIR program as HR 447 of the 117th Congress, which reauthorizes $13.5 million for the program for two years, ensures the SBA prevents abuse and misuse of funds, and expands counseling and training programs to provide online webinars, electronic mentoring platforms, and online toolkits to better serve small businesses.

Historical minimum percentages of their "extramural" R&D budgets for awards to small business concerns are:


 * 2.5% of such budget in each of fiscal years 1997 through 2011;
 * 2.6% of such budget in fiscal year 2012;
 * 2.7% of such budget in fiscal year 2013;
 * 2.8% of such budget in fiscal year 2014;
 * 2.9% of such budget in fiscal year 2015;
 * 3.0% of such budget in fiscal year 2016; and
 * 3.2% of such budget in fiscal year 2017 and each fiscal year after.

A Federal agency may exceed these minimum percentages.