Fostering American Innovation: Insights into SBIR and STTR Programs

Small Business Administration OversightHouse Small Business · 2025-02-26 · 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 at0:16:18

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 alumni0:18:19; warned the CCP continues to exploit the programs to siphon taxpayer-funded research0:18:49.

Ranking Member Nydia Velázquez (D-NY)0:19:49: Said SBIR/STTR channel about $5 billion annually and helped launch iRobot and Boom Aerospace0:20:50; called for making the programs permanent, expanding funding, and improving commercialization support0:23:22.

Rep. John Moolenaar (R-MI), Chair, Select Committee on the CCP0:24:52: Said the CCP uses talent recruitment programs, state-sponsored investment, and university partnerships to siphon SBIR-funded research0:25:53, and that some SBIR awardees later partnered with CCP-linked entities0:26:24.

Rep. Raja Krishnamoorthi (D-IL), Ranking Member, Select Committee on the CCP0:28:25: Said a 1995–2018 study found SBIR/STTR created 1.5 million jobs, averaging over 65,000 annually0:29:57; cited a US company that lost $1 billion in shareholder value and 700 jobs after an employee stole wind-energy technology for a Chinese firm0:30:27.

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 technology0:40:34; urged permanent authorization, merit-based awards with no caps, and simplified applications0:41:35.

Ms. ML Mackey, CEO, Beacon Interactive Systems0:44:06: Said Beacon's SBIR-derived flight-line platform is projected to save maintainers 1.5 hours per shift0:45:37; recommended permanent authorization and stronger phase III commercialization support0:46:37.

Mr. Cyrus Miryekta, CEO, Ravelin US0:49:10: Described CCP tactics of cultivating relationships over a decade before deploying capital into SBIR recipients0:51:41, 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 Council0:54:12: Said SBIR generates $2.50 in tax revenue per dollar spent and returns $368 per dollar at the National Cancer Institute0:56:13; noted SBA staffing overseeing SBIR fell from 17 employees to about 31:08:50.

Rep. Aaron Bean (R-FL)0:59:15: Asked Marinelli about the importance of a merit-based SBIR program0:59:45.

Rep. Nydia Velázquez (Q&A round)1:04:47: Pressed witnesses on making the programs permanent and expanding agency allocations1:05:17.

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 needs1:10:51, and Miryekta about China's use of venture capital to access sensitive technology1:12:52.

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 WWII1:15:54; asked about budget cuts to NIH/NSF and SBA staffing losses1:17:56.

Rep. Mark Alford (R-MO)1:19:57: Cited a 2021 DOD study finding China is often the "ultimate beneficiary" of SBIR-funded research1:20:27; asked Miryekta about Chinese Student Scholar Associations run out of Chinese consulates1:23:59.

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/DOGE1:25:30 and about SBIR award levels for a solar-panel company1:27:00.

Rep. Rob Bresnahan / "Mr. Muer" (R-PA)1:30:32: Discussed rare-earth extraction from coal ash with Marinelli1:31:02 and asked Miryekta about the 2023 SBIR/STTR Extension Act's impact1:34:33.

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 ownership1:36:34; asked Mackey about DOD outreach to first-time applicants1:38:06.

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 Department1:42:07.

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 invested1:45:09; asked about impacts of the Trump-era R&D tax amortization change and the funding freeze blocked by a court order1:47:40.

Rep. Brad Finstad (R-MN)1:49:42: Asked Marinelli about matching technology push with acquisition pull1:51:12, and Mackey about helping small businesses navigate federal contracting1:52:43.

Rep. Johnny Olszewski (D-MD)1:54:44: Asked Marinelli about improving geographic and demographic diversity in SBIR participation1:55:45.

Rep. Maggie Goodlander (D-NH)1:58:15: Highlighted PSI's New Hampshire facility investing $3 million in propellant/explosives capability1:59:16; asked about university programs like UNH's FOCUS program2:00:16.

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 research2:05:52.

Rep. Buddy Carter ("Mr. Jack," R-GA)2:08:55: Asked Marinelli about reducing administrative complexity for new applicants2:09:56 and Miryekta about raising SBIR award caps to $2 million2:11:56.

Rep. Kelly Morrison (D-MN)2:13:57: Noted Minnesota has received nearly 3,000 SBIR awards since 19822:14:58; 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, California2:16:29.

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 impact0:41:05.

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. government0:51:410:52:41.

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 firm0:30:27.

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 31:08:501:46:40.

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 years0:57:44.

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 treatment2:03:512:06:53.

McDonald Rivet noted a court order was needed to restore SBIR recipients' access to NSF funding after a federal funding freeze1:47:10; Glover said such disruptions can bankrupt small businesses reliant on cash flow1:47:40.

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 Company0:40:03.

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 States0:57:440:58:14.

Metadata

CommitteeHouse Small Business
Chamber / CongressHouse · 119th Congress
Date2025-02-26
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