How Often Do SBIR Phase I Companies Reach Phase II? What the Federal Record Shows

A company enters in the fiscal year of its first Phase I with that department and program. SBIR is Small Business Innovation Research. STTR is Small Business Technology Transfer. Only an exact UEI counts, the 12-character SAM identifier. An old DUNS number or a similar name is not matched.

The award file is the SBIR.gov bulk list: 219,649 rows, grants included, plus 3,303 Direct to Phase II rows. Those direct awards are not counted as a Phase I company reaching Phase II. The file has zero Phase III rows. The contract file is USAspending actions with an FPDS research code: SR1, SR2 and SR3 for SBIR phases, and ST1, ST2 and ST3 for STTR. FPDS tells agencies to use SR3 for an award "related to a Phase III contract in support of the Small Business Innovation Research (SBIR) Program." Grants have no such code. A contract Phase II is one observation per award, assigned to the UEI on the earliest eligible action.

A Phase II counts from the same department and program, in the Phase I year or inside the window after it. An earlier Phase II does not count. A NASA Phase II does not count for a Defense Phase I. A Navy Phase II does count for an Army Phase I, because both are Defense.

About 30 percent of award-file rows have no UEI: 66,692 of 219,649, plus one malformed row. The gap is older years. In FY1983, 27 percent of Defense rows had a UEI (78 of 284). From FY2015, Defense rows round to 100 percent. Of all Defense rows, 82,058 of 105,822 have a UEI, about 78 percent, so early shares describe companies that stayed registered.

The page starts the award file at FY2008 and the contract file at FY2013. A first Phase I in a file that begins in FY2008 need not be the company's first. A share is shown only when the whole window ends by the last complete year: FY2023 on the award file, so the three-year window runs through FY2020, and FY2025 on the contract file, through FY2022. Later groups keep the company count. The share is withheld and is never shown as zero. FY2024 through FY2026 are provisional on the award file, and FY2026 and FY2027 on the contract file. That lag is a convention, not proof the prior year is finished.

The table is the award file, SBIR only, three-year window, complete years only. Departments are not added. A company with a Phase I in two departments is in both rows.

On contract codes, Defense SBIR for FY2013 through FY2022 is 1,523 of 3,083, about 49 percent. NASA is 346 of 789, about 44 percent. Homeland Security is 39 of 135, about 29 percent, on a small base. Energy has zero Phase I companies in that file: 137 coded contract actions against 16,607 award-file rows, and zero of 13,466 contract numbers match a coded award.

Defense is large enough to read by year. Award file, three-year window:

FY2008 is the year most exposed to missing UEIs. The class jumps from 186 companies in FY2018 to 573 in FY2019, and FY2020 is the low point among complete years. The contract file does not copy that drop: FY2020 there is 308 of 661, about 47 percent, and its last complete three-year group, FY2022, is 126 of 259, about 49 percent.

FY2021 through FY2026 keep a company count and no three-year share. FY2021 is 434 Defense SBIR companies. That count is not a rate.

On the award file, same window and complete years, Defense STTR is 536 of 1,003, about 53 percent. On contract codes it is 546 of 1,239, about 44 percent. Homeland Security STTR is too small for a rate: two companies in the contract years on the page, and three award-file companies, all in FY2006. A company can be in both programs, so the rows stay separate.

A longer window only adds companies. For the 1,782 Defense SBIR companies with a first Phase I in FY2008 through FY2018, the five-year window is complete:

Most of what shows up by year five is already there by year three. The 59 percent uses FY2008 through FY2018 only. The 53 percent above also includes FY2019 and FY2020, and those large classes pull it down. On contract codes, the same companies held fixed for FY2013 through FY2020 (2,388 of them) come to about 45 percent within two years, 49 percent within three and 53 percent within five (1,070, 1,180 and 1,255).

Phase III here is an SR3 or ST3 code on a contract action, same UEI, department and program, from the Phase I year on. Other later obligations are not follow-on production in this count. The award file contributes none.

Defense SBIR companies from FY2008 on, open windows included, are 4,781 companies. Of them, 549 have an SR3 action, about 11 percent, about $5.6 billion obligated. Among the 3,028 whose three-year window is already complete, 452 have an SR3 action, about 15 percent, about $4.9 billion obligated. Phase III has no window and no withheld year. Contract-file companies from FY2013 on are 465 of 4,289, about 11 percent, about $4.3 billion obligated.

On the award file from FY2008 on, Defense STTR is 92 of 1,926, about 5 percent, about $676 million obligated. NASA SBIR is 195 of 1,149, about 17 percent, about $530 million. Energy SBIR is five companies, about $9 million. Homeland Security SBIR is 22 of 251, about 9 percent, about $79 million.

All SR3 and ST3 actions at the four departments sum to about $34.0 billion obligated, including companies with no Phase I year in the award file. Companies that do have a dated Phase I there account for about $23.3 billion of it. Actions with no phase code, about $10.4 billion at Defense, are not counted as Phase I, II or III.

It counts companies, not projects. It misses rows without an exact UEI. It leaves out 76,545 rows from other agencies, led by Health and Human Services (49,834) and the National Science Foundation (15,691). A Phase II at another department does not count. Direct-to-Phase-II awards are not conversions. Phase III as a grant, under some other code, or with no code is outside the count.

FY2026 is thin: 155 Defense rows, against 2,944 in FY2025 and 3,177 in FY2023, and 156 rows across the four departments. NIH notice NOT-OD-26-006 (November 17, 2025) says: "Legislative authority for the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs expired on October 1, 2025." CRS, in a report updated December 15, 2025, says: "On September 30, 2025, the authority for the programs expired." Public Law 119-83, signed April 13, 2026, strikes "September 30, 2025" and inserts "September 30, 2031." The SBA said the law "reauthorizes SBIR and STTR programs through September 30, 2031," and CRS called it the end of a six-month lapse. Obligations already on contract still appear in FY2026. The file cannot separate a reporting delay from a gap in new awards.