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In June, Trident’s Karen Haddock attended Potomac Tech Bridge’s NAVSEA SBIR/STTR Program Management Road Tour event at the University of Mary Washington’s Dahlgren Campus in King George, Va., where industry experts shared valuable information about the Small Business Innovation Research (SBIR)/Small Business Technology Transfer (STTR) program.   

Parker Page, Acting Chief Technology Officer at the Potomac Tech Bridge, opened the event by outlining the program’s purpose: to accelerate innovation and deliver solutions for the warfighter by serving as a conduit between the Navy and the Department of Defense (DoD), as well as between traditional and non-traditional innovators.  

One of the highlights of the event was Susie Drummond’s presentation on NAVSEA’s SBIR/STTR Outreach program, where she shared a wealth of helpful information about the program and resources that are available to small businesses, which we’ve recapped below.  

What is SBIR/STTR, and Who Gets to Participate?

The SBIR program funds research and development (R&D) by U.S.-based, for-profit small businesses with 500 or fewer employees and majority U.S. ownership. Managed by the Small Business Administration (SBA), the program aims to increase small business participation in federally funded R&D, stimulate technological innovation, and promote the commercialization of federal research in the private sector.  

The STTR program funds cooperative R&D between U.S.-based small businesses and research institutions, such as universities, nonprofit research organizations, and federally funded R&D centers. It creates a pathway for moving innovations from the lab to the marketplace, enabling researchers to pursue the commercial application of their technologies in partnership with small businesses.  

Eleven federal agencies, twelve DoD components, and eight Navy systems commands participate in the SBIR/STTR program.   

Program Goals  

1. Stimulate technological innovation. 
2. Use small businesses to meet Federal R/R&D needs.  
3. Foster and encourage participation in innovation and entrepreneurship by socially/economically disadvantaged firms.  
4. Increase private-sector commercialization of innovations derived from Federal R&D funding.  
5. Foster technology transfer through cooperative R&D between small businesses and research institutions (STTR).  

SBIR/STTR Program Topics 

SBIR/STTRs aren’t a free-for-all when it comes to what innovative R&D you can propose, but they don’t look like traditional services proposals, either. Instead, the program delivers funding through a Broad Agency Announcement (BAA). Throughout the year, the designated contracting authorities release topics for small businesses to respond to, outlining the specific types of technology, innovation, and solutions that the government would like to develop or acquire. 

Sneak Peek: Projected DoD FY 26 SBIR/STTR BAA Schedule!

Each DoD-wide announcement includes general DoD instructions, component-specific guidance, and a list of SBIR/STTR topics. New BAAs are released on the first Wednesday of every month, but not all components participate each time. An Open Topic BAA is also issued annually, usually in July or August. 

During the Pre-Release phase, businesses can review topics and contact topic authors directly with technical questions. Drummond encouraged participants to take advantage of this window, since questions and answers are kept private — unlike during the open period — so there’s no risk of revealing your company’s technical approach to competitors. Once the BAA is open, all technical questions must go through the DoD Topic Q&A System, where both the questions and answers are visible to everyone. The system is anonymous, and topic authors are required to respond within seven days. After the BAA closes, proposal submissions end, and evaluations begin.  

How the SBIR/STTR Process Actually Works

SBIRs/STTRs are conducted in phases, which helps companies iterate on their designs and refine their offerings before having to offer their solutions at scale. It also reduces risk for the government, because they can fund the research and prototyping incrementally until the technology is proven. Each phase has a different funding amount and period of performance, as described below. Note: It is possible to “skip” Phase I if you are responding to a Direct to Phase II (D2P2) topic.  

Phase I: Concept Development and Feasibility Demonstration  

The Phase I award is a $240,000 firm-fixed-price contract with a 6–12-month period of performance. They are funded through the SBIR/STTR program and administered by the SBIR Program Management Office (PMO).  

Phase II: Technology Development and Prototype Experimentation  

Phase II awards are cost-plus-fixed-fee contracts of up to $2 million, with a 24–36-month period of performance. They are also funded through the SBIR/STTR program and administered by the SBIR Program Management Office (PMO).  

Phase III: Commercialization (any award that derives from, extends, or completes a prior SBIR-funded effort)  

Phase III provides the right to sole-source contracts, is exempt from SBA size standards, and has no limit on the number or value of awards. For obvious reasons, reaching Phase III is the end goal for many companies. A Phase III contract must be awarded to the original SBIR performer to the greatest extent practicable (more on this below), be funded through non-SBIR/STTR sources, and be awarded by the sponsoring program office.  

What You Didn’t Know About Phase III SBIR Rules — Here’s the Scoop!

Drummond shared insightful information about Phase III Authorities, which aren’t as commonly known. The government must award Phase III contracts to the same SBIR/STTR firm that developed the tech whenever possible. This doesn’t mean a Phase III award is guaranteed – it just means that IF the government decides to advance a technology to Phase III, they must present a compelling justification to make the award to a company that isn’t the original developer. Since competition has already happened in Phases I and II, the government can award sole-source contracts for follow-on work. If the government wants to use someone else for R&D, production, or services based on that tech, it must notify the SBA. The SBA can force the DoD to cancel a contract if it should have been awarded to the original SBIR/STTR company. Phase III awards are backed by law (15 U.S.C. 638[r)[4]), so no extra justification is needed. There is no cap on how many or how big these contracts can be, and the funding comes from the program office, not SBIR/STTR seed money.  

Phase II and Stuck? This Program Could Be Your Way Out

A great resource that every company responding to a SBIR should know about is the Navy SBIR Transition Program: Navy STP. Navy STP is designed to help small businesses with Navy-funded SBIR/STTR Phase II awards transition their tech into military use or the commercial market. The program connects individuals or businesses with warfighters, acquisition teams, and big-name contractors, and offers support such as mentoring, marketing help, and one-on-one coaching. You can join during either year of your Phase II. Companies that participate in this program are 68% more likely to successfully transition their tech!  

This kind of support is especially important because it helps bridge the dreaded “valley of death” -- that tricky gap between developing a promising prototype in Phase II and securing a Phase III contract or commercial deal. A lot of great tech gets stuck in this gap due to a lack of follow-on funding or connections. Navy STP is designed to help you avoid that. Other transition programs are NAVY Launch, DoN SBIR/STTR Experimentation Cell (DoN SEC), and Private Capital Education. These are definitely worth looking into if you're participating in the SBIR program!  

Real World SBIR Case Study  

A memorable part of the event was Jay Rouse’s presentation of the Areté SBIR Success Story, where he shared valuable lessons from his company’s SBIR journey. Today, Areté is recognized for its strong track record of SBIR awards, which it has honed over the years as it evolved from an ad-hoc process to a more structured approach. The company implemented rigorous procedures, created a SharePoint site housing a SBIR library, and invested in training and support for scientists and engineers. While they still respond to open topics, most of their efforts now focus on shaping customer-driven topics through proactive engagement, including inviting customers to product demos. Building on previous successes, they work closely with satisfied customers and educate government stakeholders on the benefits of the SBIR program. To improve proposal quality, they developed in-house templates, established internal reviewers, leveraged external consultants, and tied proposal development funding to clear go/no-go decisions.  

Rouse emphasized the importance of picking the right topic. Ideally, it should be in a technical area where your team already has expertise — even better if it builds on work you’re already doing. But it’s not just about technical alignment; the topic should also make sense for your company as a whole. Does it fit your capabilities? Can it realistically be done within your budget? He also stressed the need to understand the competitive landscape. This includes identifying who else may pursue the same topic, and whether the solicitation language seems to favor a specific competitor. And finally, there’s the commitment factor. A strong proposal takes time and effort to get right. Winning could mean a five-year journey on that single topic. Before diving in, Rouse recommends asking your team: Is this something we’re truly ready to invest in?  

Conclusion

From insider tips to real-world case studies, this event was a crash course in navigating the SBIR/STTR landscape. Whether you’re new to the program or have years of experience, staying informed is your best competitive edge.  For more information on the SBIR program, see our SBIR Blog.  

Looking for More?

Looking for more insights into SBIR/STTR? Have you read our blogs below? Click the image below to read the blog. 

Click the image above to read, Navigating Joint Ventures in Government Contracting

Click the image above to read, Cracking a GovCon Code: Understanding DoD OTAs

Written by Karen Haddock, with contributions from Rebecca Wayland
Karen is a proposal manager at Trident Proposal Management and a former U.S. Army Officer with extensive experience in project management, logistics, and education. Based on the East Coast, she supports clients around the world as part of our globally dispersed team. 

Rebecca is our Chief of Staff. As a Grey Team member, she offers comprehensive proposal management, capture support, market research, and training. She is also our GWAC and MA-IDIQ lead, so if you’re exploring OASIS+ (Phase II or the on-ramp), MAPS, or SHIELD, she is definitely your SME. As a U.S. Navy veteran and military spouse based in Hawai’i, she supports clients around the world as part of our globally dispersed team.