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SBIR & STTR
Phases, award sizes, eligibility and the DoW application process, explainedPublished · By DefDex
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Short answer
How does SBIR/STTR funding work for defense startups?
Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) give U.S. small businesses equity-free federal R&D funding in phases: Phase I tests feasibility, Phase II develops a prototype, and Phase III is follow-on work paid from non-SBIR sources. Department of War (DoW) topics are released monthly on the DoW SBIR/STTR Innovation Portal (DSIP).
Key takeaways
- As of April 2026, agencies may award up to $323,090 for SBIR Phase I and $2,153,927 for Phase II without a waiver, and each DoW component sets its own caps within those limits.
- SBIR and STTR applicants must be for-profit U.S. businesses with 500 or fewer employees, more than 50% owned and controlled by U.S. citizens, permanent residents or qualifying U.S. entities.
- Under STTR, the small business must formally partner with a research institution and do at least 40% of the work.
- SBIR and STTR lapsed for about six months after September 30, 2025, and were reauthorized on April 13, 2026 through September 30, 2031.
- DoW topics pre-release on the first Wednesday of each month on DSIP, and FY2027 Release 1 closes November 25, 2026.
What Are SBIR and STTR?
The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs give U.S. small businesses non-dilutive (equity-free) federal R&D funding. The Small Business Administration (SBA) coordinates them, and 11 participating federal agencies fund awards.
The main difference is that for STTR, the small business must formally partner with a research institution: a nonprofit college or university, a domestic nonprofit research organization, or a federally funded research and development center (FFRDC). Under STTR the small business must do at least 40% of the work and the research institution at least 30%. Under DoW SBIR, the small business must do at least two-thirds of the Phase I work and at least half of the Phase II work.
Sources: SBIR.gov: About SBIR and STTR · SBIR.gov: How to Apply · SBIR.gov: Eligibility FAQ · DoW 2026 SBIR BAA, Amendment 2 (July 15, 2026)
What Are the SBIR Phases and Award Sizes?
SBIR and STTR run in phases: Phase I tests feasibility, Phase II develops a prototype, and Phase III is follow-on work funded from non-SBIR sources. As of April 2026, SBA lets agencies award up to $323,090 for Phase I and $2,153,927 for Phase II without a waiver. DoW says the Phase I period of performance is generally six to twelve months and the Phase II period generally 24 months. Phase III funding comes from private capital or other government contracts and can be awarded without new competition. DoW also allows Direct to Phase II proposals on some topics when feasibility has already been shown.
Each DoW component sets its own caps within the SBA limits, and many topics are smaller. Small businesses may also request Technical and Business Assistance (TABA) funding on top of the award: up to $6,500 per Phase I project and $50,000 per Phase II project.
The 2026 reauthorization added Strategic Breakthrough awards of up to $30 million over up to 48 months for companies with a prior Phase II. They require a dollar-for-dollar match from private capital or non-SBIR federal funds.
- Air Force and Space Force (AFWERX/SpaceWERX): Phase I up to about $323,000 for up to six months; Phase II up to $2.1 million for up to 24 months.
- Army: Phase I up to $300,000 over 1 to 6 months; Phase II up to $2 million over 12 to 18 months.
- Navy: Phase I up to $240,000 ($140,000 base plus $100,000 option); Phase II up to $2,000,000 including options.
Sources: DoW 2026 SBIR BAA, Amendment 2 (July 15, 2026) · SBIR.gov: About SBIR and STTR · AFWERX: Get Funded · DoW 2026 SBIR BAA, Release 1 component instructions
Who Is Eligible for SBIR?
SBIR and STTR are for U.S. small businesses: applicants must be for-profit businesses located in the U.S. with 500 or fewer employees, including affiliates, and must be more than 50% owned and controlled by U.S. citizens, permanent residents or qualifying U.S. entities. Non-profits cannot receive awards directly. For DoW awards, all R&D must be done in the United States, and the principal investigator must be mainly employed by the small business.
Companies majority-owned by multiple venture capital, hedge fund or private equity firms cannot apply to DoW topics unless a component's instructions allow it. All proposals now go through a DoW Foreign Risk Evaluation security review, which the 2026 law made mandatory across agencies.
Sources: SBIR.gov: How to Apply · AFWERX: Get Funded · DoW 2026 SBIR BAA, Amendment 2 (July 15, 2026) · CRS Insight IN12705: Small Business Research Programs Reauthorized After Six-Month Lapse
How Do You Apply for a DoW SBIR?
Register in SAM.gov and the SBA Company Registry, create a DSIP account, then submit a proposal against an open topic. Department of War (DoW) SBIR and STTR topics are posted on, and proposals submitted through, the DoW SBIR/STTR Innovation Portal (DSIP) at dodsbirsttr.mil. Each fiscal year, DoW issues a Broad Agency Announcement (BAA) and a Commercial Solutions Opening (CSO), then releases topics under them monthly. New topics pre-release on the first Wednesday of each month; you can ask the topic authors questions during pre-release. Topics then open for about four weeks, and proposals are due by 12:00 p.m. ET on the close date.
FY2027 Release 1 pre-released October 7, 2026, opens October 28, and closes November 25, 2026. From October 1, 2026, a small business may submit only one proposal per DoW topic.
- Register in SAM.gov (System for Award Management), which issues your Unique Entity ID (UEI) and CAGE code.
- Register in the SBA Company Registry on SBIR.gov to get the SBC Control ID required by DSIP. SBIR.gov's identity verification takes time and cannot be expedited.
- Create a DSIP account, which signs in through Login.gov, and have a firm administrator set up the company profile.
Sources: DSIP (DoW SBIR/STTR Innovation Portal) · DoW 2026 SBIR BAA, Amendment 2 (July 15, 2026)
Which DoW Components Run SBIR Programs?
Each Service and Defense agency runs its own SBIR/STTR program and writes its own topics, with component-specific instructions and award caps. Components that posted topics in the FY2026 DoW solicitations include:
- Army, through the Army SBIR|STTR program (part of Army FUZE), including xTech prize competitions tied to SBIR topics
- Department of the Navy (Navy and Marine Corps)
- Department of the Air Force, through AFWERX (Air Force) and SpaceWERX (Space Force)
- Defense Advanced Research Projects Agency (DARPA)
- Missile Defense Agency (MDA)
- U.S. Special Operations Command (SOCOM)
- Defense Threat Reduction Agency (DTRA)
- Defense Health Agency (DHA)
- Defense Logistics Agency (DLA)
- Defense Microelectronics Activity (DMEA)
- National Geospatial-Intelligence Agency (NGA)
- Office of the Secretary of War offices, including the Strategic Capabilities Office (SCO)
Sources: DoW 2026 SBIR BAA, Amendment 2 (July 15, 2026) · DoW 2026 SBIR BAA, Release 1 component instructions · Army SBIR|STTR
Where Do You Find and Submit SBIR/STTR Topics?
| Program | Run by | Where |
|---|---|---|
 | U.S. Department of War | Online |
| U.S. Small Business Administration | Online |
 | AFWERX, Department of the Air Force | — |
 | U.S. Army (Army FUZE, under ASA(ALT)) | — |
 | U.S. Department of the Navy | — |
DoW SBIR/STTR Innovation Portal (DSIP)
U.S. Department of War
The DoW SBIR/STTR Innovation Portal (DSIP) is the official site for finding Department of War SBIR and STTR topics, asking topic authors questions, and submitting proposals.
What you get
- Searchable topics for each active BAA and CSO (Broad Agency Announcement and Commercial Solutions Opening), plus the solicitation documents.
- Topic Q&A with government authors during pre-release.
- A listserv that sends notices of new solicitations.
- Who it’s for
- U.S. small businesses that meet SBIR/STTR eligibility and are registered in SAM.gov and the SBA Company Registry.
- How to apply
- Monthly releases: topics pre-release on the first Wednesday of the month and close about four weeks after opening. FY2027 Release 1 opens October 28 and closes November 25, 2026.
- Where
- Online
Sources: DSIP (DoW SBIR/STTR Innovation Portal) · DoW 2026 SBIR BAA, Amendment 2 (July 15, 2026)
SBIR.gov
U.S. Small Business Administration
SBIR.gov is the Small Business Administration's (SBA) site for the SBIR and STTR programs across all 11 participating agencies. It hosts the SBA Company Registry, the policy directive, and a searchable award database.
What you get
- Company Registry registration, which issues the SBC Control ID needed to submit DoW proposals.
- Program rules, eligibility FAQs, tutorials and a search of past awards.
- Directory of local support organizations that help with proposals.
- Who it’s for
- Any small business considering SBIR or STTR funding from any federal agency.
- Where
- Online
Sources: SBIR.gov: About SBIR and STTR · SBIR.gov: How to Apply · DSIP (DoW SBIR/STTR Innovation Portal)
AFWERX SBIR/STTR
AFWERX, Department of the Air Force
AFWERX manages the Department of the Air Force's SBIR and STTR programs. It has awarded more than 9,400 contracts worth $7.47 billion since 2020.
What you get
- Phase I: up to about $323,000 for up to six months. Phase II: up to $2.1 million for up to 24 months, including Direct to Phase II for companies with a Department of the Air Force customer.
- Strategic Funding Increase (STRATFI): $3 million to $15 million in SBIR/STTR funds, matched by government or private money, for up to 48 months.
- Tactical Funding Increase (TACFI): $375,000 to $2 million with 1:1 cost share, for up to 24 months.
- Strategic Breakthrough: federal awards of up to $30 million with a required 1:1 match.
- Who it’s for
- For-profit U.S. small businesses with 500 or fewer employees, majority U.S.-owned, building dual-use technology for Air Force or Space Force needs.
- Defense angle
- Topics come from Air Force and Space Force mission needs.
- How to apply
- Through the DoW monthly releases on DSIP. FY2027 Release 1 (27.BZ and 27.TZ) pre-released October 7, opens October 28 and closes November 25, 2026.
Sources: AFWERX: Get Funded
Army SBIR|STTR
U.S. Army (Army FUZE, under ASA(ALT))
The Army SBIR|STTR program funds small businesses against Army priorities. It is run under the Assistant Secretary of the Army for Acquisition, Logistics, and Technology (ASA(ALT)) as part of the Army FUZE portfolio.
What you get
- Phase I: up to $300,000 over 1 to 6 months, often starting from a white paper.
- Phase II: up to $2 million over 12 to 18 months to build a prototype.
- Some topics are tied to xTech prize competitions; xTech|Search 10, for example, offers cash prizes and a Phase I proposal opportunity for finalists.
- Who it’s for
- U.S. small businesses eligible for SBIR or STTR.
- Defense angle
- Topics come directly from Army modernization and Soldier needs.
- How to apply
- Topics are listed on the Army SBIR|STTR site with individual open and close dates.
Sources: Army SBIR|STTR · Army SBIR|STTR: xTech|Search 10 topic
Navy SBIR/STTR
U.S. Department of the Navy
The Department of the Navy SBIR/STTR program funds small businesses against Navy and Marine Corps needs. It says it has funded more than $11 billion to commercialize SBIR/STTR technologies.
What you get
- Phase I: up to $240,000 ($140,000 base plus $100,000 option).
- Phase II: up to $2,000,000 including options; individual Systems Commands (SYSCOMs) may award less.
- Transition support through the Navy SBIR Transition Program (STP) and other Navy programs.
- Who it’s for
- U.S. small businesses eligible for SBIR or STTR.
- Defense angle
- Topics are sponsored by Navy Systems Commands and other Navy organizations.
- How to apply
- Navy topics are released through the DoW monthly BAA releases on DSIP.
Sources: Navy SBIR/STTR home · DoW 2026 SBIR BAA, Release 1 component instructions
Checked against each program’s own pages on Oct 12, 2026. Terms and deadlines change; confirm on the official site before applying.
Frequently Asked Questions
How long is SBIR Phase I?
At the Department of War (DoW), a Small Business Innovation Research (SBIR) Phase I period of performance is generally six to twelve months, and Phase II is generally 24 months. Components set their own limits: AFWERX and SpaceWERX Phase I awards run up to six months, and Army Phase I awards run 1 to 6 months. Phase I tests feasibility; Phase II develops a prototype.
How much is an SBIR Phase I award?
As of April 2026, the Small Business Administration (SBA) lets agencies award up to $323,090 for Small Business Innovation Research (SBIR) Phase I and $2,153,927 for Phase II without a waiver. Department of War components set their own caps: Air Force and Space Force Phase I up to about $323,000, Army up to $300,000, and Navy up to $240,000. Many topics are smaller.
What is the difference between SBIR and STTR?
Small Business Technology Transfer (STTR) requires a formal partnership with a research institution; Small Business Innovation Research (SBIR) does not. The STTR partner can be a nonprofit college or university, a domestic nonprofit research organization or a federally funded research and development center (FFRDC). Under STTR the small business does at least 40% of the work and the institution at least 30%.
Who is eligible for SBIR?
Small Business Innovation Research (SBIR) applicants must be for-profit businesses located in the U.S. with 500 or fewer employees, including affiliates, and more than 50% owned and controlled by U.S. citizens, permanent residents or qualifying U.S. entities. Non-profits cannot receive awards directly. For Department of War awards, all R&D must be done in the United States, and the principal investigator must be mainly employed by the small business.
How do I apply for a DoW SBIR?
To apply for a Department of War (DoW) Small Business Innovation Research (SBIR) award, register in SAM.gov, register in the Small Business Administration (SBA) Company Registry for an SBC Control ID, and create an account on the DoW SBIR/STTR Innovation Portal (DSIP). Topics pre-release on the first Wednesday of each month, open for about four weeks, and accept one proposal per company per topic.
Is SBIR reauthorized?
Yes. The Small Business Innovation and Economic Security Act (S. 3971), signed on April 13, 2026 as Public Law 119-83, extends Small Business Innovation Research (SBIR), Small Business Technology Transfer (STTR) and their related pilots through September 30, 2031. Authority had expired on September 30, 2025 and lapsed for about six months. The Department of War pre-released its first post-lapse topics the same day.
What is an SBIR Strategic Breakthrough award?
A Strategic Breakthrough award is a Small Business Innovation Research (SBIR) or Small Business Technology Transfer (STTR) award of up to $30 million over up to 48 months, for companies with a prior Phase II. The 2026 reauthorization added it. It requires a dollar-for-dollar match from private capital or non-SBIR federal funds; AFWERX describes it as a federal award with a required 1:1 match.