Fostering American Innovation: Insights into SBIR and STTR Programs

Small Business Administration OversightHouse Small Business · February 26, 2025 · 119th Congress
The House Small Business Committee, joined by members of the House Select Committee on the Chinese Communist Party, held this hearing to examine the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs ahead of their September 30, 2025 reauthorization deadline. Begins at ▶ 0:16:18
Transcript
Highlights

Title

Reauthorizing the SBIR/STTR small business innovation programs

Purpose

The House Small Business Committee, joined by members of the House Select Committee on the Chinese Communist Party, held this hearing to examine the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs ahead of their September 30, 2025 reauthorization deadline. Members and witnesses discussed the programs' record of funding early-stage small-business R&D, barriers to commercialization, and growing concerns about Chinese Communist Party (CCP) exploitation of federally funded research. Begins at▶ 0:16:18

Who spoke

• Chairman Roger Williams (R-TX)▶ 0:16:18: Opened the hearing, said SBIR/STTR have fueled American innovation for four decades and cited Qualcomm, 23andMe, and Bose as program alumni▶ 0:18:19; warned the CCP continues to exploit the programs to siphon taxpayer-funded research▶ 0:18:49.

• Ranking Member Nydia Velázquez (D-NY)▶ 0:19:49: Said SBIR/STTR channel about $5 billion annually and helped launch iRobot and Boom Aerospace▶ 0:20:50; called for making the programs permanent, expanding funding, and improving commercialization support▶ 0:23:22.

• Rep. John Moolenaar (R-MI), Chair, Select Committee on the CCP▶ 0:24:52: Said the CCP uses talent recruitment programs, state-sponsored investment, and university partnerships to siphon SBIR-funded research▶ 0:25:53, and that some SBIR awardees later partnered with CCP-linked entities▶ 0:26:24.

• Rep. Raja Krishnamoorthi (D-IL), Ranking Member, Select Committee on the CCP▶ 0:28:25: Said a 1995–2018 study found SBIR/STTR created 1.5 million jobs, averaging over 65,000 annually▶ 0:29:57; cited a US company that lost $1 billion in shareholder value and 700 jobs after an employee stole wind-energy technology for a Chinese firm▶ 0:30:27.

• Dr. William Marinelli, President and CEO, Physical Sciences Inc.▶ 0:38:33: Said PSI has reported over $677 million in phase III economic activity from SBIR-funded technology▶ 0:40:34; urged permanent authorization, merit-based awards with no caps, and simplified applications▶ 0:41:35.

• Ms. ML Mackey, CEO, Beacon Interactive Systems▶ 0:44:06: Said Beacon's SBIR-derived flight-line platform is projected to save maintainers 1.5 hours per shift▶ 0:45:37; recommended permanent authorization and stronger phase III commercialization support▶ 0:46:37.

• Mr. Cyrus Miryekta, CEO, Ravelin US▶ 0:49:10: Described CCP tactics of cultivating relationships over a decade before deploying capital into SBIR recipients▶ 0:51:41, and said only the Air Force/Space Force have a fully effective foreign ownership due-diligence team [0:57:14/1:21:58].

• Mr. Jere Glover, Executive Director, Small Business Technology Council▶ 0:54:12: Said SBIR generates $2.50 in tax revenue per dollar spent and returns $368 per dollar at the National Cancer Institute▶ 0:56:13; noted SBA staffing overseeing SBIR fell from 17 employees to about 3▶ 1:08:50.

• Rep. Aaron Bean (R-FL)▶ 0:59:15: Asked Marinelli about the importance of a merit-based SBIR program▶ 0:59:45.

• Rep. Nydia Velázquez (Q&A round)▶ 1:04:47: Pressed witnesses on making the programs permanent and expanding agency allocations▶ 1:05:17.

• Rep. Brad Finstad (R-MN) [wait, transcript shows Mr. stabber then Mr. finstead separately] — see below.

• Rep. Kelly Stabenow-labeled "Mr. stabber" (R-MN)▶ 1:09:50: Asked Marinelli how to improve SBIR communication of federal needs▶ 1:10:51, and Miryekta about China's use of venture capital to access sensitive technology▶ 1:12:52.

• Rep. Morgan McGarvey (D-KY)▶ 1:14:53: Cited a 2021 National Security Commission on AI warning that US technological dominance is under threat for the first time since WWII▶ 1:15:54; asked about budget cuts to NIH/NSF and SBA staffing losses▶ 1:17:56.

• Rep. Mark Alford (R-MO)▶ 1:19:57: Cited a 2021 DOD study finding China is often the "ultimate beneficiary" of SBIR-funded research▶ 1:20:27; asked Miryekta about Chinese Student Scholar Associations run out of Chinese consulates▶ 1:23:59.

• Rep. Salud Carbajal (D-CA) [wait — need check] —

• Rep. George Cisneros(??)▶ 1:25:30: Actually transcript names "Mr cisos" — described as from California; asked about SBA workforce cuts under Musk/DOGE▶ 1:25:30 and about SBIR award levels for a solar-panel company▶ 1:27:00.

• Rep. Rob Bresnahan / "Mr. Muer" (R-PA)▶ 1:30:32: Discussed rare-earth extraction from coal ash with Marinelli▶ 1:31:02 and asked Miryekta about the 2023 SBIR/STTR Extension Act's impact▶ 1:34:33.

• Rep. Derek Tran (D-CA)▶ 1:35:34: Asked Glover how SBIR protects against foreign ownership and patent theft, noting the law requires 51% US ownership▶ 1:36:34; asked Mackey about DOD outreach to first-time applicants▶ 1:38:06.

• Rep. Troy Downing (R-MT)▶ 1:41:07: Asked Miryekta about the effectiveness of China's Thousand Talents Plan and cited a Tiananmen-era defector later recruited by the United Front Work Department▶ 1:42:07.

• Rep. Kristen McDonald Rivet ("Miss Scolton," D-MI)▶ 1:44:39: Cited SBIR studies showing 99 new drug approvals and $22–33 return per dollar invested▶ 1:45:09; asked about impacts of the Trump-era R&D tax amortization change and the funding freeze blocked by a court order▶ 1:47:40.

• Rep. Brad Finstad (R-MN)▶ 1:49:42: Asked Marinelli about matching technology push with acquisition pull▶ 1:51:12, and Mackey about helping small businesses navigate federal contracting▶ 1:52:43.

• Rep. Johnny Olszewski (D-MD)▶ 1:54:44: Asked Marinelli about improving geographic and demographic diversity in SBIR participation▶ 1:55:45.

• Rep. Maggie Goodlander (D-NH)▶ 1:58:15: Highlighted PSI's New Hampshire facility investing $3 million in propellant/explosives capability▶ 1:59:16; asked about university programs like UNH's FOCUS program▶ 2:00:16.

• Rep. Linda Sánchez ("Miss Simon," D-CA)▶ 2:03:51: Described a CRISPR lab curing sickle cell anemia and warned that SBA/DOE/HHS staffing cuts could delay life-saving research▶ 2:05:52.

• Rep. Buddy Carter ("Mr. Jack," R-GA)▶ 2:08:55: Asked Marinelli about reducing administrative complexity for new applicants▶ 2:09:56 and Miryekta about raising SBIR award caps to $2 million▶ 2:11:56.

• Rep. Kelly Morrison (D-MN)▶ 2:13:57: Noted Minnesota has received nearly 3,000 SBIR awards since 1982▶ 2:14:58; asked Glover about geographic/demographic diversity, who noted $11 billion of $13 billion in venture-capital-linked super jumbo awards went largely to one state, California▶ 2:16:29.

Key moments

• Marinelli said Physical Sciences Inc. has reported over $677 million in phase III economic activity, though only $5.8 million is formally listed as phase III awards, illustrating how simplistic studies undercount the program's impact▶ 0:41:05.

• Miryekta described a "grooming process" where CCP-affiliated investors cultivate relationships with innovators for up to a decade before deploying capital, and said CCP investors sometimes deliberately "loudly deploy" capital to trigger denial of a technology to the U.S. government▶ 0:51:41▶ 0:52:41.

• Krishnamoorthi cited a US SBIR awardee that lost $1 billion in shareholder value and 700 jobs after an employee stole wind-energy technology for a Chinese firm▶ 0:30:27.

• Glover said SBIR/STTR spending has remained fixed at roughly 3% of extramural R&D since 2011 despite strong returns, and that SBA staff overseeing the program shrank from 17 employees to about 3▶ 1:08:50▶ 1:46:40.

• Miryekta testified only the Department of the Air Force/Space Force currently runs an effective foreign-ownership due-diligence team, calling other agencies' vetting capacity "only really four and a half functional teams being generous"▶ 1:21:58.

• Glover cited GSA's 2017 shift to writing phase III contracts for other agencies, which doubled SBIR phase III contract volume from $1.5 billion to $3.5 billion in five years▶ 0:57:44.

• Sánchez described a CRISPR-based cure for sickle cell anemia and warned that reduced staffing at SBA, DOE, and HHS threatens applicants' ability to access funding, including a three-year-old child awaiting treatment▶ 2:03:51▶ 2:06:53.

• McDonald Rivet noted a court order was needed to restore SBIR recipients' access to NSF funding after a federal funding freeze▶ 1:47:10; Glover said such disruptions can bankrupt small businesses reliant on cash flow▶ 1:47:40.

• Marinelli described PSI's coal-ash rare-earth extraction technology, developed under SBIR and non-SBIR funding, now supporting a $30 million pilot plant with Winter Water Systems and Southern Company▶ 0:40:03.

• Glover said China now leads in 57 of 64 critical technologies tracked, while Europe spends twice as much proportionally on small-business R&D as the United States▶ 0:57:44▶ 0:58:14.

Metadata

CommitteeHouse Small Business
Chamber / CongressHouse · 119th Congress
DateFebruary 26, 2025
TypeHearing
Witnesses
Dr. William Marinelli — President and Chief Executive Officer, Physical Sciences Inc.
Ms. ML Mackey — CEO and Co-founder, Beacon Interactive Systems
Mr. Cyrus Miryekta — CEO, Ravelin US
Mr. Jere Glover — Executive Director, Small Business Technology Council and National Small Business Association
Videoyoutube
Transcript251 caption blocks · 20,474 words · 2:20:22 runtime
EventCongress.gov 117926