Sec. 3. Phase II strategic breakthrough funding
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Section 9 of the Small Business Act ( 15 U.S.C. 638 ) is amended— in subsection (aa), by adding at the end the following: The requirement under paragraph
(1)and the requirement to receive a waiver from the Administrator under paragraph
(4)do not apply to a Federal agency for awards of not more than $30,000,000 to a small business concern with funds made available under a strategic breakthrough allocation (as defined in subsection (ff)(3)(A)). ; and in subsection (ff), by adding at the end the following: In this paragraph, the term strategic breakthrough allocation means, with respect to a Federal agency with a required expenditure under subsection (f)(1) in excess of $100,000,000, an expenditure amount from the SBIR allocation under subsection (f)(1) of such agency of not more than 0.50 percent of the extramural budget for research or research and development designated for such agency for fiscal year 2026 and every fiscal year thereafter. Under this paragraph, a funding agreement may be awarded to a small business concern by a Federal agency using funds made available under a strategic breakthrough allocation. In the case of a Phase II agreement that is awarded to a small business concern by a Federal agency using funds made available under a strategic breakthrough allocation, the following requirements shall apply: A Federal agency may award from a strategic breakthrough allocation not more than $30,000,000 to a small business concern, including its affiliates, in a single award or series of awards based on reaching production or development milestones, if the total period of performance of the project with respect to which such funds are awarded is not more than 48 months. The small business concern shall— have been awarded not less than 1 prior Phase II award under the SBIR or STTR program; demonstrate not less than 100 percent matching funds from— new private capital as a result of an award using funds made available under a strategic breakthrough allocation; new funding awarded by a government agency under a program other than Phase I or II of the SBIR or STTR program as a result of an award using funds made available under a strategic breakthrough allocation; or a combination of funds described in items
(aa)and (bb); demonstrate a technology that is an effective solution, as determined by market research; and only be eligible for an award from the strategic breakthrough allocation at the Department of Defense if the small business concern— provides a product, process, or technology that meets a necessary level of readiness and has a commitment for inclusion in a program objective memorandum from an official with the rank of program acquisition executive or higher in an acquisition organization of the Department of Defense; provides a product, process, or technology that will meet high priority requirements or operational needs of a military department through a successful transition and into the acquisition process; and demonstrates not less than 20 percent of the required matching funds under subclause
(II)come from new funding awarded by the Department of Defense under a program other than Phase I or II of the SBIR or STTR program as a result of an award using funds made available under a strategic breakthrough allocation. The Federal agency shall complete any contract awards using strategic breakthrough allocation funds not later than 90 days after receiving a proposal from a small business concern for the award. Eligible activities by a small business concern using strategic breakthrough allocation funds are any critical technology areas or requirements deemed necessary by the Federal agency. In making awards using funds made available under a strategic breakthrough allocation, the Federal agency shall consider— the potential of the small business concern to advance the national security capabilities of the United States; the potential of the small business concern to provide new technologies or processes, or new applications of existing technologies, that will enable new alternatives to existing programs; whether a customer in a Federal agency has expressed an intent to purchase and integrate technology from the small business concern into its operations; or whether a particular technology area is undercapitalized by private investment. Each Federal agency shall implement streamlined processes and requirements for submitting proposals and applying for awards using funds made available under a strategic breakthrough allocation. . Section 9(y) of the Small Business Act ( 15 U.S.C. 638(y) ) is amended— in paragraph (2)— by striking shall identify and inserting shall— identify ; in subparagraph (A), as so designated— by inserting , including small business concerns with an award from the strategic breakthrough allocation (as defined in subsection (ff)(3)(A), before that have the potential ; and by striking the period at the end and inserting a semicolon; and by adding at the end the following: ensure, in collaboration with SBIR program managers of each component, that research programs identified under subparagraph
(A)are analyzed within the programming and budgeting process as budget requests are developed; and provide to the Committee on Small Business and Entrepreneurship of the Senate and the Committees on Small Business and Science, Space, and Technology of the House of Representatives information on the integration of SBIR and STTR awardees in budget rollouts for research, development, testing, and evaluation activities. ; by striking paragraph (3); by redesignating paragraphs (4), (5), and
(6)as paragraphs (3), (4), and (5), respectively; and in paragraph (5), as so redesignated— in subparagraph (B), by striking and at the end; by redesignating subparagraph
(C)as subparagraph (D); and by inserting after subparagraph
(B)the following: establish a mechanism to provide small business concerns with direct access to program and requirements offices that may purchase technology from the small business concern under Phase III of the SBIR program; and . In this subsection, the term appropriate committees of Congress means— the Committee on Small Business and Entrepreneurship of the Senate; the Committee on Small Business of the House of Representatives; and the Committee on Science, Space, and Technology of the House of Representatives. Not later than 60 days after the date of enactment of this Act, the head of each Federal agency that is eligible to make an award from funds made available under a strategic breakthrough allocation (as defined in paragraph
(3)of subsection
(ff)of section 9 of the Small Business Act ( 15 U.S.C. 638 ), as added by this section) shall brief the appropriate committees of Congress on whether that Federal agency plans to make awards pursuant to the authority provided under such paragraph (3), including the reasons why the Federal agency plans to, or does not plan to, use that authority. The head of each Federal agency that opts to make awards pursuant to the authority under paragraph
(3)of subsection
(ff)of section 9 of the Small Business Act ( 15 U.S.C. 638 ), as added by this section, shall, on a recurring basis until the Federal agency finalizes procedures for making those awards, brief the appropriate committees of Congress regarding the implementation of such paragraph
(3)by that Federal agency. Effective on September 30, 2031— this section and the amendments made by this section shall cease to have effect; and the provisions of law amended by this section shall be restored as if such amendments had not been enacted.
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Sec. 3
Phase II strategic breakthrough funding
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