Review of the SBIR and STTR Programs at the Department of Defense (2026)
Chapter: Front Matter
Consensus Study Report
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Suggested citation: National Academies of Sciences, Engineering, and Medicine. 2026. Review of the SBIR and STTR Programs at the Department of Defense. Washington, DC: National Academies Press. https://doi.org/10.17226/29329.
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COMMITTEE ON THE REVIEW OF THE SMALL BUSINESS INNOVATION RESEARCH AND SMALL BUSINESS TECHNOLOGY TRANSFER PROGRAMS AT THE DEPARTMENT OF DEFENSE
MARYANN P. FELDMAN (Co-Chair), Arizona State University
SCOTT STERN (Co-Chair), Massachusetts Institute of Technology
MICHAEL ANDREWS, University of Maryland Baltimore County
ANDREA BELZ, University of Southern California
JANET BERCOVITZ, University of Colorado Boulder
ELI BERMAN, University of California, San Diego (until January 9, 2024)
M. DIANE BURTON, Cornell University
RAMALINGAM CHELLAPPA (NAE), Johns Hopkins University (as of February 5, 2024)
DONNA GINTHER, University of Kansas
JORGE GUZMAN, Columbia University
WARREN KATZ, The Alliance for Commercial Technology in Government (until January 9, 2024)
LAUREN LANAHAN, University of Oregon
ELLEN M. LORD, Department of Defense (former)
VICTOR R. MCCRARY, The Catholic University of America
J. MICHAEL MCQUADE, Harvard University
KYLE MYERS, Harvard Business School
ARUN SERAPHIN, National Defense Industrial Association
STEPHANIE S. SHIPP, Iowa State University
ROSEMARIE ZIEDONIS, Boston University
Study Staff
GAIL E. COHEN, Project Director
RENEE DALY, Senior Program Assistant (through February 2024)
DAVID DIERKSHEIDE, Program Officer
ERIN ROONEY, Senior Program Assistant (November 2023–October 2025)
ALYSSA RUDELIS, Mirzayan Science and Technology Policy Fellow (January–May 2024)
EMILY SCHMITZ, Associate Program Officer (July 2024–October 2025)
Consultant
EVAN E. JOHNSON, Arclight Analytics, Principal Consultant
Reviewers
This Consensus Study Report was reviewed in draft form by individuals chosen for their diverse perspectives and technical expertise. The purpose of this independent review is to provide candid and critical comments that will assist the National Academies of Sciences, Engineering, and Medicine in making each published report as sound as possible and to ensure that it meets the institutional standards for quality, objectivity, evidence, and responsiveness to the study charge. The review comments and draft manuscript remain confidential to protect the integrity of the deliberative process.
We thank the following individuals for their review of this report:
Although the reviewers listed above provided many constructive comments and suggestions, they were not asked to endorse the conclusions or recommendations of this report nor did they see the final draft before its release. The review of this report was overseen by MARCIA RIEKE (NAS), The University of Arizona, and SALLIE KELLER (NAE), U.S. Census Bureau. They were responsible for making certain that an independent examination of this report was carried out in accordance with the standards of the National Academies and that all review comments were carefully considered. Responsibility for the final content rests entirely with the authoring committee and the National Academies.
Acknowledgments
The committee would like to express its appreciation for insights, information, experiences, and perspectives provided by invited speakers during the conduct of this study. We recognize the considerable time and effort made by DOD, especially the SBIR/STTR program staff, to help the committee understand the complexity associated with DOD’s programs. DOD staff were responsive and generous with their time in answering the committee’s questions as well as providing valuable data to aid the committee with its analyses. The committee also wants to thank Evan Johnson, principal consultant, for invaluable contributions of research and technical assistance in the preparation of this report. Finally, we would particularly like to recognize the leadership of Gail Cohen and the contributions of the National Academies staff, especially David Dierksheide, Erin Rooney, and Emily Schmitz.
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Contents
THE NATIONAL ACADEMIES STUDY MANDATE
STUDY METHODOLOGY AND LIMITATIONS
A BRIEF HISTORY OF AMERICAN DEFENSE INNOVATION
THE DEFENSE INNOVATION ECOSYSTEM
CONSIDERATIONS FOR THE COMMITTEE’S ANALYSIS OF THE SBIR/STTR PROGRAMS
THE ROLE OF SBIR/STTR IN ACHIEVING DEFENSE MODERNIZATION GOALS
3 The Landscape of DOD SBIR/STTR Awardees
PROGRAM STRUCTURE AND PARTICIPATION
DISTRIBUTION OF SBIR/STTR FUNDING AND AWARDS
NEW ENTRANTS TO THE DOD SBIR/STTR PROGRAMS
DOD’S SBIR/STTR APPLICATION AND AWARD PROCESS
POSTAWARD IMPACT: PHASE III, TECHNOLOGY TRANSITION, AND FOLLOW-ON CONTRACTING
VARIATION IN PROGRAM EMPHASIS AND ADMINISTRATIVE ORIENTATION
5 Who Applies and Who Gets Funded
APPLICANTS TO THE SBIR PROGRAM
STTR’S DISTINCTIVE RATIONALE AND STRUCTURE
CHALLENGES TO STTR EFFECTIVENESS
7 Impact of SBIR/STTR Awards on the DOD Mission
LIMITATIONS AND METHODOLOGY OF THE ANALYSIS
MEASURING THE IMPACT OF DOD’S SBIR/STTR PROGRAMS ON THE DOD INNOVATION ECOSYSTEM AND INDUSTRIAL BASE
DOD’S SBIR/STTR PROGRAMS AS A GATEWAY TO DOD R&D AND PROCUREMENT
DOD SBIR/STTR PERFORMERS ATTRACT SIGNIFICANT FOLLOW-ON DOD RESEARCH AND PROCUREMENT EXPENDITURES
8 Impact of DOD’s SBIR/STTR Programs: Innovation and Additional Private-Sector Funding
DIFFERENCES BETWEEN SBIR AND STTR
DISTRIBUTION OF DOD SBIR/STTR AWARDS
THE 2022 EXPERIENCED FIRM CRITERION
VARIATION ACROSS DOD SERVICE/COMPONENT AND ACROSS FEDERAL AGENCIES IN AWARDS TO EXPERIENCED FIRMS
PERFORMANCE OF EXPERIENCED FIRMS
EXPERIENCED SBIR/STTR FIRMS AND THE DEFENSE INNOVATION ECOSYSTEM
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Boxes, Figures, and Tables
BOXES
S-1 Findings and Recommendations (by Report Chapter)
2-1 Technology Readiness Levels and the DOD SBIR/STTR Programs
4-2 Examples of Outreach Strategies and Activities
4-3 Key Elements of Phase I Review Process
7-1 The Phase III Program and Designation
7-2 Technology Readiness Levels
8-1 Defining Commercialization
FIGURES
2-1 Research, development, test, and evaluation (RDT&E) programs
2-2 The defense innovation ecosystem
3-1 OUSD (R&E) SBIR/STTR award structure
3-3 DOD SBIR/STTR Phase I award amounts, by year (fiscal years 2012–2023)
3-4 DOD SBIR/STTR Phase II award amounts, by year (fiscal years 2012–2023)
3-5 DOD SBIR/STTR awards, by contract type and by amount and year (fiscal years 2016–2021)
3-6 SBIR/STTR spending, by DOD service/component (fiscal years 2012–2023)
3-7 Percentage of total DOD SBIR/STTR funding, by service/component (fiscal year 2023)
3-8 Number of DOD SBIR/STTR awards, by service/component (fiscal year 2023)
3-9 Air Force SBIR/STTR funding, by phase (fiscal years 2012–2023)
3-10 Number of Air Force SBIR/STTR awards, by phase (fiscal years 2012–2023)
3-11 Impact of DOD’s SBIR/STTR programs on geographic diversity of funding (fiscal years 2012–2023)
4-1 DOD SBIR/STTR program organizational chart
6-1 DOD’s STTR expenditures (fiscal years 2012–2023)
6-2 Number of DOD STTR Phase I and Phase II awards (fiscal years 2012–2023)
6-3 Geographic distribution of DOD STTR awards per million capita (fiscal years [FY] 2012–2023)
7-5 DOD SBIR/STTR firm share of the defense innovation ecosystem (2012–2020)
9-1 Distribution of DOD Phase I SBIR/STTR awards per firm (fiscal years 2012–2023)
9-2 Distribution of DOD Phase II SBIR/STTR awards per firm (fiscal years 2012–2023)
9-3 Number of experienced firms receiving DOD SBIR/STTR awards, by year (fiscal years 2012–2023)
9-5 Phase I to II transition rates of DOD SBIR/STTR Phase I awardees (fiscal years [FY] 2012–2020)
TABLES
2-1 Defense Prime Contractors: Five Largest by Obligations (Fiscal Year 2023)
2-2 Technology Readiness Level Definitions for Hardware
2-3 Technology Readiness Levels and Their Relation to DOD Funding Programs
3-2 Overview of DOD Services and Components (Fiscal Year 2023)
3-3 New Entrants in the DOD SBIR/STTR Programs, by Service/Component (Fiscal Years 2012–2023)
3-4 State Distribution of DOD SBIR and STTR Awards and Funds (Fiscal Years 2012–2023)
4-1 Key Elements of the Review Process, by Service/Component
4-3 Translating the Two-dimensional Typology into Implementation
5-1 DOD SBIR and STTR Applications and Awards (Fiscal Years 2019–2023)
5-2 DOD SBIR Applications and Awards, by Phase (Fiscal Years 2019–2023)
5-3 SBIR Applications, by DOD Service/Component (Fiscal Years 2019–2023)
5-4 Distribution of DOD SBIR/STTR Applications and Awards across States (Fiscal Years 2019–2023)
5-5 Difference in Funded SBIR Phase I Applications, by State (Fiscal Years 2019–2023)
5-6 Difference in Funded SBIR Phase II Applications, by State (Fiscal Years 2019–2023)
6-1 STTR Awardee Characteristics Across Participating Federal Agencies (Fiscal Years 2012–2023)
6-2 STTR Awardee Characteristics Across Top Five DOD Divisions (Fiscal Years 2012–2023)
6-3 Total DOD SBIR/STTR Program Funding, by State (Fiscal Years 2012–2023)
6-4 Top DOD STTR Research Institution Partners (Fiscal Years 2012–2023)
8-1 Patenting by DOD SBIR/STTR Awardees (2012–2020) and Forward Citations
Preface
This report is the result of a request by Congress for an assessment of the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs at each of the principal agencies that conduct or fund research and development (R&D) activities across the federal government. The SBIR program has become the largest and most comprehensive public R&D funding program for small business research in the United States, and indeed has been emulated by other countries. An underlying tenet of the SBIR program, and the related STTR program, is that small and young firms are an important source of new ideas that provide the basis for technological innovation, productivity increases, and subsequent economic growth. Predicated on the observation that it is difficult for small and young firms to find financial support for their ideas, the SBIR/STTR programs have become known as America’s Seed Fund.
Yet this characterization captures only one dimension of the legislative objectives and operation of the programs. By involving qualified small businesses in the nation’s R&D efforts, SBIR/STTR awards stimulate the development of innovative technologies, help move research closer to the market, and address the needs of citizens underserved because of limited market incentives. Equally important, and particularly relevant for the current report, the SBIR/STTR programs aim to help federal agencies fulfill their missions and objectives by stimulating technological innovation that meets agency needs—first by funding early-stage R&D, and ultimately by integrating successful technologies into use through procurement and other means.
Specifically, this report focuses on the operation and performance of the SBIR/STTR programs at the Department of Defense (DOD). As the largest and most complex of the federal SBIR/STTR programs, encompassing more than a dozen distinct service and agency components, the DOD SBIR/STTR enterprise reflects the scale and diversity of the Department’s mission—from fundamental science to applied technology and procurement. The committee convened by the National Academies of Sciences, Engineering, and Medicine to carry out this study undertook a detailed assessment of the process by which SBIR and STTR awards are made at DOD; a survey of the landscape of awards that have been granted; and a detailed quantitative analysis examining the innovation, commercialization, and follow-on funding outcomes of firms participating in the programs. Collectively, these analyses, documented in this report, are intended to
offer a more comprehensive and precise assessment of the SBIR and STTR programs than has been provided in previous studies of this agency carried out by the National Academies. Here we highlight three broad themes from the report and make one plea for a more systematic data infrastructure to help understand and quantify outcomes stemming from the programs.
First, the DOD SBIR and STTR programs play a central role in advancing DOD’s mission by connecting the nation’s small business innovators directly to defense research, development, and operational needs. These programs strengthen the Department’s ability to identify, fund, and integrate innovative technologies that support national defense—first through early-stage R&D and, ultimately, through procurement and fielding of new capabilities. While the evidence for large procurement contracts is more difficult to ascertain (both because of data issues related to subcontracting and also because these technologies are typically part of larger systems whose primary contractors are much larger firms), the overall tenor of the evidence in the report supports the idea that the DOD SBIR/STTR program has been successful in its goals of supporting the mission of DOD itself. Moreover, the cumulative effect of the program is to serve as a vital bridge between the small business and startup innovation ecosystem and the Department’s mission-oriented R&D enterprise.
Second, firms require substantial experience engaging with DOD before their innovations are effectively incorporated into the defense R&D and acquisition system. Firms that have received multiple SBIR/STTR awards—particularly those with at least five Phase I projects—are substantially more likely to generate inventions, secure follow-on DOD or private funding, and contribute meaningfully to defense capabilities. These findings highlight that learning to navigate DOD’s complex contracting and technical environment is itself an important part of the innovation process. Recent legislative provisions that restrict the participation of “experienced” firms in the SBIR/STTR programs are therefore not supported by the data and risk constraining the pool of high-performing small businesses that the Department depends upon. Moreover, these requirements impose additional administrative burdens on DOD program managers and reduce flexibility to fund the most meritorious projects. The evidence suggests that experience in the DOD context should be viewed as an asset (or at least a neutral rather than negative attribute) in leveraging small business innovation to meet defense needs.
Third, the emergence of open topic SBIR programs—first pioneered by the Air Force under AFWERX and subsequently adopted by other DOD components—represents an important experiment in widening access to the defense innovation system. The evidence suggests that these open approaches can be valuable for identifying nontraditional suppliers and attracting new entrants, particularly in large and technologically diverse organizations. However, the report also finds that a single, uniform approach is unlikely to serve the entire Department effectively. Smaller or more specialized agencies often face significant administrative burdens in processing open topic proposals and may
find traditional, solicitation-driven approaches better aligned with their specific mission needs.
Finally, with the ongoing evaluations of the DOD SBIR/STTR programs, there remains a critical need for a coherent framework and system that track these investments and communicate their outcomes effectively across the Department. The committee’s work demonstrates that a more integrated data infrastructure (linking awards across phases and components and making those linkages visible through a more visible and accessible portal) would provide the foundation for assessing progress and informing both leadership and the broader innovation community. Further, research and innovation are driven by individuals (scientists, engineers, and entrepreneurs whose careers intersect repeatedly with the defense innovation system). Enhancing the capacity to track the role of individual researchers would yield a deeper understanding of knowledge flows, supply chain linkages, and the cumulative contribution of SBIR/STTR to DOD’s mission. Greater transparency and accessibility of data would not only strengthen program management but also reinforce public confidence in the value and stewardship of these vital national investments.
Maryann P. Feldman, Co-Chair
Scott Stern, Co-Chair
Committee on the Review of the Small Business Innovation Research and Small Business Technology Transfer Programs at the Department of Defense
December 2025
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Acronyms and Abbreviations
| AI | artificial intelligence |
| APFIT | Accelerate the Procurement and Fielding of Innovative Technologies |
| ASA(ALT) | Assistant Secretary of the Army for Acquisition, Logistics, and Technology |
| BAA | Broad Agency Announcement |
| CBD | Chemical and Biological Defense Command |
| CR | continuing resolution |
| CSO | Commercial Solutions Opening |
| CUI | controlled unclassified information |
| CYBERCOM | United States Cyber Command |
| DARPA | Defense Advanced Research Projects Agency |
| DHA | Defense Health Agency |
| DIU | Defense Innovation Unit |
| DLA | Defense Logistics Agency |
| DMEA | Defense Microelectronics Activity |
| DOD | U.S. Department of Defense |
| DOE | U.S. Department of Energy |
| DSIP | Defense SBIR/STTR Innovation Portal |
| DTRA | Defense Threat Reduction Agency |
| FAR | Federal Acquisition Regulation |
| FFRDC | Federally Funded Research and Development Center |
| FOCI | foreign ownership, control, or influence |
| FPDS | Federal Procurement Data System |
| FY | fiscal year |
| GAO | U.S. Government Accountability Office |
| GPS | Global Positioning System |
| HBCU | historically Black college or university |
| HHS | U.S. Department of Health and Human Services |
| HSI | Hispanic-serving institution |
| IC | Intelligence Community |
| IP | intellectual property |
| IPO | initial public offering |
| JPEO-CBRND | Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense |
| JSTO-CBD | Joint Science and Technology Office for Chemical and Biological Defense |
| KOSBIR | Korea Small Business Innovation Research |
| KOSGEB | Small and Medium Industry Development Organization (Turkey) |
| MDA | Missile Defense Agency |
| MSI | minority-serving institution |
| NASA | National Aeronautics and Space Administration |
| NDAA | National Defense Authorization Act |
| NDS | National Defense Strategy |
| NDSTS | National Defense Science & Technology Strategy |
| NGA | National Geospatial-Intelligence Agency |
| NNSA | National Nuclear Security Administration |
| NSF | National Science Foundation |
| OCEA | Office of Commercial and Economic Analysis |
| OMB | Office of Management and Budget |
| OSC | Office of Strategic Capital |
| OSD | Office of the Secretary of Defense |
| OSRD | Office of Scientific Research and Development |
| OUSD(R&E) | Office of the Under Secretary of Defense for Research and Engineering |
| PI | principal investigator |
| POR | program of record |
| PPBE | planning, programming, budgeting, and execution |
| PSC | Product or Service Code |
| R&D | research and development |
| RDER | Rapid Defense Experimentation Reserve |
| RDT&E | research, development, test, and evaluation |
| RIF | Rapid Innovation Fund |
| RISE | Rapid Integrated Scalable Enterprise |
| ROI | return on investment |
| SAM | System for Award Management |
| SBA | U.S. Small Business Administration |
| SBIR | Small Business Innovation Research |
| SBIRI | Small Business Innovation Research Initiative (India) |
| SME | subject matter expert |
| SOF | Special Operations Forces |
| STEM | science, technology, engineering, and mathematics |
| STP | SBIR/STTR Transition Program |
| STRATFI | Strategic Funding Increase Program |
| STTR | Small Business Technology Transfer |
| TABA | Technical and Business Assistance |
| TACFI | Tactical Funding Increase Program |
| TPOC | technical point of contact |
| TRA | Technology Readiness Assessment |
| TRL | Technology Readiness Level |
| USAF | United States Air Force |
| U.S.C. | United States Code |
| USPTO | United States Patent and Trademark Office |
| USSOCOM | United States Special Operations Command |
| VC | venture capital |
