INNOVATE Act

Key Points

• The bill extends the SBIR and STTR small business innovation programs through 2028 and creates a new Strategic Breakthrough fund allowing the Department of Defense to award up to $30 million to a single small business to transition promising military technology into production.
• To open the door for newcomers, the bill caps repeat winners at $75 million in total SBIR/STTR awards and creates a new Phase 1A program with a simple two-page application and awards of up to $40,000 for companies that have never won an SBIR or STTR grant before.
• The bill prohibits agencies from considering the race, gender, or ethnicity of applicants or requiring diversity and equity statements in award decisions. Instead, it refocuses outreach efforts on businesses in 'emerging states' (the 25 states with the fewest winners) and rural areas.
• The bill strengthens protections against foreign adversary influence by expanding due diligence requirements, cross-referencing applicants against eight government watchlists, and allowing agencies to recover funds if a company shares government-funded technology with a foreign country of concern within 10 years.
• The bill requires firm-fixed-price contracts as the default for SBIR and STTR awards (unless the agency head approves an exception) and tightens performance benchmarks so companies that keep winning early grants but never commercialize their technology can be blocked from future funding.