Ranking Members Markey, Velázquez, Lofgren Slam SBA Proposal That Defies Congress, Harms Successful Innovation Small Businesses

SBA proposal defies bipartisan law passed earlier this year and could restrict successful small businesses from participating in the SBIR and STTR programs

Letter (PDF)

(Washington, October 16) - Ranking Member Edward J. Markey (D-Mass.), alongside House Small Business Committee Ranking Member Nydia Velázquez (D-NY-7) and House Science, Space, and Technology Ranking Member Zoe Lofgren (D-CA-18), sent a letter to Small Business Administration Office of Investment and Innovation Associate Administrator Joshua Carter to condemn a new proposal that could restrict competitive small businesses from participating in small business innovation programs.

The change threatens to restrict successful small businesses from participating in the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs by implementing excessive and severe standards for businesses to commercialize their technologies. Businesses that fail to meet the new proposed standard for commercialization would be temporarily barred from submitting SBIR and STTR proposals, preventing them from continuing to produce lifesaving and groundbreaking technologies for the American people. The proposed change defies the commercialization standards that were written into law and reaffirmed by the Small Business Innovation and Economic Security Act, which Ranking Member Markey worked to pass unanimously through the Senate in March of this year. The bipartisan bill was signed into law in April.

In the letter, the lawmakers wrote, "While commercialization is not the singular goal of the SBIR and STTR programs, the intent of Congress in codifying both the minimum and increased commercialization standards was to ensure that promising technology progresses forward to the benefit of the American people. By subjecting companies that have won 25 or more Phase II awards to this new minimum standard, the notice expressly goes against Congressional intent when it comes to commercialization. Companies who are successfully winning Phase II awards have demonstrated their ability and intent to move their SBIR and STTR technologies forward. It is concerning that SBA intends to set a new standard that is aimed expressly at companies who have shown promise in moving their technologies forward and could punish such successful small businesses."

In the letter, the lawmakers write that the proposal goes against the intent of Congress, and that SBA's retroactive implementation of the new guidelines does not give small businesses enough time to plan and adjust their business practices. The lawmakers request that SBA extend the public comment period of the new proposal, delay implementation until the proposal is fully vetted, and give small businesses enough time to prepare for SBA's excessive changes to the programs.

Ranking Member Markey fought hard to protect SBIR and STTR in the Small Business Innovation and Economic Security Act, which was signed into law in April 2026. Because of Ranking Member Markey's leadership, the Small Business Innovation and Economic Security Act:

• Reauthorized the SBIR/STTR programs for five years. Ranking Member Markey delivered the assurance small businesses need to take the necessary risks to invest their time and resources in developing technologies that will one day solve the problems of tomorrow by reauthorizing the program for five years.
• Rejected lifetime caps and preserved merit-based competition in the SBIR/STTR program. Because of Ranking Member Markey's successful defense of the innovation economy and the merit-based nature of the SBIR and STTR programs, more than 3,700 U.S. small businesses, including nearly 300 in Massachusetts, will continue to have full access to more than $4 billion in SBIR and STTR funding every year.
• Protected the STTR program and research institutions' ability to participate. Ranking Member Markey fought against proposed cuts to the STTR program, ensuring that innovation and collaboration between small businesses and research institutions, such as Harvard University, Tufts University, and the Dana-Farber Cancer Institute in Massachusetts, can continue to thrive.
• Ensured all SBIR funding was retained. Ranking Member Markey fought to ensure that any agency that was unable to spend their Fiscal Year 2026 SBIR/STTR funding due to the extended lapse was authorized to carry over such funding into Fiscal Year 2027. This ensured that no funding was lost as a result of the programs' lapse.
• Maintained strong foreign due diligence requirements and requires transparency from agencies. Ranking Member Markey successfully extended the 2022 bipartisan foreign due diligence program and secured guidelines for agencies to notify small businesses when they've been flagged for potential foreign risk, allowing small businesses to mitigate such risks and remain competitive for SBIR/STTR funding.