WASHINGTON, D.C. – Today, Congressman Roger Williams (R-TX), Chairman of the House Committee on Small Business, introduced the House version of the Investing in National Next-Generation Opportunities for Venture Acceleration and Technological Excellence (INNOVATE) Act.

This legislation reauthorizes and strengthens the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs to support the development of critical technologies, bolster American manufacturing, and promote small business growth. This bill closely aligns with the Senate version of the INNOVATE Act, introduced on March 5, 2025.

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“GOP lawmakers pitch joint small-business program renewal plan”

CQ Roll Call

Briana Reilly

July 28, 2025

The top Republicans on the House and Senate small-business panels are pitching a compromise plan to extend two programs key to bolstering innovation at the Pentagon as the deadline for renewing the efforts looms. 

The bill (HR 4777) represents a critical step for negotiations heading into the congressional recess, in which members will be facing down a Sept. 30 expiration date for the decades-old small-business grant programs that seek to bring new startups and technologies to commercialization, including to the military. 

In all, 11 agencies — including the Defense Department — operate a Small Business Innovation Research program and five run a Small Business Technology Transfer program, according to a January overview from the Congressional Research Service.

Co-led by Rep. Roger Williams of Texas and Sen. Joni Ernst of Iowa, the bill would extend for three years the complementary initiatives while implementing a series of changes seeking to tamp down on contractors’ potential foreign ties and ensure more capabilities ultimately make it onto the battlefield. 

“With this legislation, we can expand private investment's role in R&D, support breakthrough innovation, and ensure Main Street continues to drive economic growth,” Williams said in a Monday statement, referring to research and development. “I look forward to the conversations ahead and the reauthorization of these critical programs.” 

The proposal draws heavily from an earlier Ernst bill (S 853) that critics previously argued unfairly targets firms that have won multiple awards under the innovation research program. 

While the new version notably scraps language that would have set minimum commercialization standards for repeat award winners, some were quick to pan the broader bill — including measures that would cap the total amount of grant funding a contractor could win — for cracking down on what they called “experienced SBIR firms.” 

"The current proposal seeks to micromanage a program that has thrived on an entrepreneurial spirit, both on the part of participants in the program and the government acquisition officials who rely on SBIR to solve their unique technology needs,” said Richard McNamara, a former naval executive officer for submarine programs who now runs consulting firm RRM and Associates. 

Mills debate returns 

Central to the reauthorization debate this time around is the influence of so-called SBIR mills, or businesses that win multiple awards but fall short of producing proposals that result in actual contracts. 

The topic was also among the prevailing issues of the 2022 extension negotiations, a down-to-the-wire discussion that dragged into the final days of fiscal 2022 and fueled concerns of a lapse of SBIR authorities. 

There does not appear to be a consensus among lawmakers as to whether mills are a problem in need of legislative intervention. 

For example, a Democratic reauthorization bill (HR 3169, S 1573) from Rep. Nydia M. Velázquez of New York and Sen. Edward J. Markey of Massachusetts — both of whom have touted the “merit-based” nature of the programs — included language seeking to encourage new entrants and expand participation, but largely steered clear of aiming to set limitations on preexisting award winners.   

Ernst’s original bill, however, featured a provision that would set a lifetime award cap of $75 million on companies seeking to participate in the innovation research program. The cap would also apply to the company’s “affiliates, spinouts, and subsidiaries,” per the text. 

The Williams-Ernst proposal largely maintains that restriction, but includes a waiver option that would allow agency officials to make an award to an otherwise disqualified business if doing so “is imperative for national security purposes” and “cannot be performed by other qualifying small business concerns,” the bill states. 

New additions 

While the new bill draws from Ernst’s original plan, the updated text contains a handful of additional provisions that have been priorities for the House Small Business Committee. 

For example, the legislation includes a measure that would bar federal agencies from issuing SBIR awards to certain entities that engage in censorship activities — a variation of a bill Williams introduced last month (HR 4067). 

Another provision would seek to broaden the use of the Small Business Administration’s investment company program, under which participating firms provide capital to startups, while a third would encourage agencies participating in the SBIR program to enhance outreach to rural communities. 

Finally, the Williams-Ernst bill would seek to expand the use of what’s known as the open-topics process for issuing awards under SBIR. Rather than service officials specifying their problems and mission needs to industry, the approach allows companies to pitch their solutions to agency problems. 

Specifically, the bill would require each federal agency participating in the SBIR program to hold one open-topic solicitation annually. A source with knowledge of the plan said that some federal officials had been unsure about whether they had the authority to pursue open topics without an authorizing provision. 

The language would build on a mandate in the fiscal 2022 extension of the small-business programs (PL 117-183) that required Defense Department components to conduct at least one open-topic announcement per year. 

Negotiations on deck 

The new bill comes as so-called six-corner negotiations between the chairs and ranking members of the House and Senate small-business panels and the House Science, Space and Technology Committee are set to commence in earnest. 

Those discussions could include debate over the programs’ renewal timeline. The Williams-Ernst bill would extend the efforts through fiscal 2028, while the Democrats’ proposal would make both permanent. 

Prior to 2022's extension, the previous reauthorization — included in the fiscal 2017 National Defense Authorization Act (PL 114-328) — continued the program for five years. 

Bill Marinelli, the CEO of defense and homeland security technology company Physical Sciences Inc., favors a seven-year window. Physical Sciences has won more than 1,500 SBIR awards over the years, mostly from DOD. 

“Having a reauthorization with a three-year sunset where we don't know whether we're going to be in the program makes it very difficult for anyone to invest, regardless of where the money is coming, in this type of technology development,” he said in a May interview. 

The final version of the plan could pass as standalone legislation, or it could be attached to the House or Senate’s fiscal 2026 defense policy bills (HR 3838, S 2296). 

Both chambers are now looking to take up their versions of the National Defense Authorization Act in September. A source familiar said Ernst is open to all options to move the legislation forward.

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