What does Preamble of S 3971 do?

This bill extends the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. The bill's stated purpose is to extend the SBIR and STTR programs and for other purposes.

What does SHORT TITLE. of S 3971 do?

This bill is formally titled the Small Business Innovation and Economic Security Act.

What does BOLSTERING RESEARCH SECURITY OF SBIR AND STTR AWARDS. of S 3971 do?

This section amends Section 9 of the Small Business Act to bolster research security of SBIR and STTR awards. It requires agencies to evaluate small business concerns for security risks, considering factors like due diligence, disclosures, and coordination with the intelligence community. The evaluation includes assessing foreign ownership and relationships with entities or individuals on specified lists, such as the UFLPA Entity List and the Section 889 Prohibition List. Agencies must provide notifications to small business concerns when an award is denied based on a security risk determination, outlining the basis for the determination. It clarifies that a denial does not preclude eligibility for future awards. The due diligence process (subsection (vv)) now includes assessing cybersecurity practices, patent analysis, employee analysis, and foreign ownership ties. Section 4(b)(4) of the SBIR and STTR Extension Act of 2022 is amended to extend the required GAO study from 3 years to 8 years.

What does PHASE II STRATEGIC BREAKTHROUGH FUNDING. of S 3971 do?

This section amends the Small Business Act to establish a 'Strategic Breakthrough Funding' program. Federal agencies with over $100 million in required expenditures can allocate up to 0.50% of their extramural research budget for strategic breakthrough awards to small businesses. Awards under this program can be up to $30 million and have a performance period of up to 48 months. Small businesses receiving these awards must have prior Phase II SBIR/STTR awards, demonstrate matching funds (private capital, other government funding, or a combination), and prove their technology is a viable solution. The Department of Defense has specific requirements for awardees, including demonstrating a necessary level of readiness and a commitment for inclusion in a program objective memorandum. Federal agencies must complete contract awards within 90 days of receiving a proposal. Agencies are required to consider factors like the potential to advance national security, provide new technologies, and customer intent to purchase the technology. The program terminates on September 30, 2031, after which the Small Business Act will revert to its original form.

What does REDUCING ADMINISTRATIVE BURDEN. of S 3971 do?

This section amends the Small Business Act to establish a process for limiting the number of proposals small business concerns can submit in response to Phase I and Phase II solicitations under the SBIR or STTR program. Federal agencies must set a limit, using one of three methods: a fiscal year basis, a solicitation basis, or a topic basis. The Director of the SBIR or STTR program office within each Federal agency is responsible for setting these limits and cannot delegate this authority. A waiver process is established, allowing agencies to waive the proposal limit on a topic-by-topic basis if the topic is time-sensitive and urgent. Waivers require written justification and approval from the Administrator and the Undersecretary, with a 15-day approval timeframe. Agencies are limited to granting waivers for no more than 5 percent of topics in any fiscal year. Federal agencies must report the methodology and impact of the proposal limits to relevant Congressional committees, as well as provide written notification of any granted waivers.

What does PHASE III AWARD EDUCATION. of S 3971 do?

This section amends Section 9 of the Small Business Act to define 'agency acquisition workforce'. The definition of 'agency acquisition workforce' includes employees with procurement or acquisition responsibilities, as described in sections 1703 of Title 41 and 101(a) of Title 10. The Administrator, in coordination with the Secretary of Defense and other agencies, is directed to establish training activities for contracting officers and the agency acquisition workforce. Training topics will include the missions of the SBIR and STTR programs, Phase III agreements, data rights, and sole source award contracts. Funding for these training activities may be drawn from funds available for subsections (y) and (mm). The bill adds contracting officer and acquisition workforce training activities to a list of activities funded under subsection (mm)(1).

What does PHASE III IMPROVEMENTS. of S 3971 do?

This section modifies Section 9(j)(4) of the Small Business Act to direct Procurement Center Representatives to advocate for the maximum practicable use and transition of products, services, and technologies developed under SBIR or STTR programs to Phase III. The Administrator of the Small Business Administration must modify policy directives within one year of the Act's enactment to reflect these changes. This section also amends Section 9(r)(4) of the Small Business Act to require the development of simplified and standardized procedures and model contracts for Phase I, Phase II, and Phase III SBIR awards. Federal agencies are required to report to the Administrator on actions taken to support these objectives. The section mandates the issuance of standardized solicitation provisions and contract clauses to provide clear guidance to small businesses regarding information needed for Phase III awards.

What does TECHNICAL AND BUSINESS ASSISTANCE IMPROVEMENTS. of S 3971 do?

This section amends Section 9 of the Small Business Act to improve technical and business assistance for small business concerns engaged in SBIR or STTR projects. Recipients of SBIR or STTR awards are now authorized to select technical and business assistance providers, rather than agencies entering into agreements with vendors. The amendments specify eligible uses of funds, including hiring or augmenting staff for training activities. Phase I SBIR or STTR recipients can use up to $6,500 per project for assistance, while Phase II recipients can use up to $50,000. Federal agencies may perform targeted reviews of technical and business assistance funding. Federal agencies with Innovation Corps (I-Corps) programs are required to offer participation in I-Corps training programs to SBIR or STTR recipients. Recipients can use funds authorized under Section 9(q) to participate in I-Corps programs.

What does IMPROVING SBIR AND STTR DATA COLLECTION. of S 3971 do?

This section amends Section 9(k)(1) of the Small Business Act to add reporting requirements for SBIR and STTR awards. The amendments require reporting on whether an award is direct to Phase II, subsequent Phase II, a strategic breakthrough award, or a Phase III prime or subcontract award. The Administrator of General Services is directed to update the Federal Procurement Data System to include reporting on SBIR and STTR award classifications. The updated system will also require reporting on whether contracts are designated as Phase III contracts. Reporting will be required on whether non-SBIR contracts and subcontracts are utilizing SBIR- or STTR-funded technology. Government contracting officers must reference SBIR or STTR contract identification numbers for prior work when recording Phase II or Phase III contracts.

What does EXTENDING SBIR AND STTR AUTHORIZATION. of S 3971 do?

This section amends Section 9 of the Small Business Act. It extends authorization for the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. The authorization is extended from September 30, 2025, to September 30, 2031. Federal agencies participating in the SBIR or STTR program may carry over unexpended funds from fiscal year 2026 to fiscal year 2027.

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Small Business Innovation and Economic Security Act — S. 3971

Last updated: 3/4/2026 · Introduced: 3/3/2026

Author: Joni Ernst (R-IA)

TL;DR (AI)

The bill extends the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs through September 30, 2031, and related pilot programs.
It establishes a 'Strategic Breakthrough Funding' program allowing federal agencies to award up to $30 million to small businesses with prior Phase II awards for innovative technologies.
The bill limits the number of SBIR/STTR proposals small businesses can submit, while establishing a waiver process for urgent or time-sensitive topics.
It mandates training for federal contracting officers on SBIR/STTR programs and streamlines procedures for Phase III awards.
The bill increases technical and business assistance funding for small businesses participating in SBIR/STTR projects and improves data collection related to these awards.

119th Congresspassed senateOfficial page

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Includes provisions on preamble, short title., and 9 more.

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