Senate Passes Ernst Updates to Put Small Businesses First in America’s Innovation Program
SBIR-STTR programs will now prioritize truly small businesses over mills and deter foreign influence.
WASHINGTON DC, March 4, 2026 – The U.S. Senate unanimously passed Chair of the U.S. Senate Committee on Small Business and Entrepreneurship Senator Joni Ernst’s (R-Iowa) major reforms to better safeguard and steward our nation’s research and development dollars in the SBIR-STTR programs.
Even though the SBIR-STTR programs are supposed to be America’s seed fund for small businesses, Ernst has exposed how they have prioritized a few large companies over truly small businesses, wasted tax dollars that should be producing innovation for our national interests, and failed to protect taxpayer-funded technologies from foreign influence.
Ernst has worked with small businesses, stakeholders, and across the aisle to change this unacceptable status quo, prioritize truly small businesses, and protect our innovations from Beijing.
“I will always fight to put small businesses first,” said Ernst. “When confronted with the status quo of the SBIR program, I knew I could no longer let China win, allow waste to run rampant, fail our warfighters, or let large companies crowd out actual small businesses. After working across the aisle, these necessary reforms will strengthen the integrity of America’s seed fund while unlocking new innovation, and I look forward to working with this administration to make sure taxpayers’ investments are turned into a reality. Now, with these commonsense changes, America’s seed fund can serve our truly small businesses.”
Ernst secured key updates in this legislation, which include:
- Strengthening due diligence standards and closing loopholes to ensure awardees safeguard tech against Chinese espionage
- Holding recipients accountable to producing cutting-edge technologies and capabilities for the warfighter
- Requiring for the first time all SBIR offices to place an annual limit on applications to prioritize truly small businesses over large, entrenched companies that know how to game the system
- Establishing the first-of-its-kind Strategic Breakthrough awards to enable agencies to scale the most promising technologies while ensuring businesses have skin in the game by requiring matching dollars and buy-in from the agency
- Creating transparency of the use of tax dollars by improving data collection and reporting
Full remarks:
“I rise today as the Senate puts small businesses first in America’s innovation program and gives them the certainty they need to build and grow.
“For too long, our nation’s seed fund programs, SBIR and STTR, have been allowed to prioritize a few large companies over truly small businesses.
“Until now, these programs received blank checks to squander tax dollars meant to advance innovation in our national interest and have not protected taxpayer-funded technologies from foreign influence.
“When confronted with this unacceptable status quo, I knew Congress could work together to find a solution for our truly small businesses.
“After working across the aisle and with our small businesses, we now have the necessary reforms to strengthen America’s seed fund while unleashing small businesses to deliver for taxpayers and our warfighters.
“Together, our bipartisan, bicameral legislation will ensure awardees safeguard tech against Chinese espionage; hold recipients accountable to actually producing cutting-edge technologies and capabilities – no more blank checks; require for the first time an annual limit on applications to prioritize truly small businesses over large companies who know how to game the system; establish the first-of-its-kind strategic breakthrough awards; and finally, provide taxpayers with transparency into who receives these awards.
“These changes were necessary and worth taking the time to absolutely get it right.
“And tonight, I am proud the Senate is unanimously passing these long-overdue updates for innovators.”
###
