Small BusinessLast Reviewed: May 2026GM-INS-141 // 12 min read // MAY 2026
SBIR Phase I & Phase II Award Amounts 2026: Agency-by-Agency Breakdown
The SBIR and STTR Extension Act of 2022 raised award caps significantly — Phase I is now $275,000 and Phase II is $1,837,500. Here is the complete 2026 breakdown by agency, with success rates, timelines, and Phase III pathways.
Quick Answer
SBIR award caps in 2026: Phase I up to $275,000 (6 months), Phase II up to $1,837,500 (24 months). These caps were raised by the SBIR/STTR Extension Act of 2022. Actual award amounts vary by agency — DOD commonly awards the full cap; NIH and NSF awards often run below the cap. The federal government awards approximately $4+ billion in SBIR/STTR annually across 11 participating agencies.
2026 SBIR Award Cap Summary
Phase
Duration
SBIR Cap
STTR Cap
Phase I
6 months
$275,000
$275,000
Phase II
24 months
$1,837,500
$1,837,500
Phase IIB (supplement)
Varies
$500,000 max
$500,000 max
Phase III
Ongoing
No set-aside cap
No set-aside cap
SBIR Awards by Agency (FY2026)
DOD (All Components)
Annual Budget: ~$1.5B
Phase I: $275K | Phase II: $1.75M avg
Topics published quarterly; DARPA awards up to $2M+ for Phase II
NIH
Annual Budget: ~$1.2B
Phase I: $275K | Phase II: $1.5M avg
Fast-Track (combined Phase I/II) available; omnibus solicitation 3x/year
DOE
Annual Budget: ~$280M
Phase I: $275K | Phase II: $1.65M avg
Topics include clean energy, nuclear, grid modernization
NSF
Annual Budget: ~$230M
Phase I: $275K | Phase II: $1.0M avg
America's Seed Fund; deep tech emphasis; pitch competitions
NASA
Annual Budget: ~$175M
Phase I: $150K avg | Phase II: $750K avg
Aerospace, Earth science, space technology topics
HHS (non-NIH)
Annual Budget: ~$95M
Phase I: $275K | Phase II: $1.5M avg
CDC, SAMHSA, HRSA programs in public health technology
What Changed in 2026
The SBIR and STTR Extension Act of 2022 (P.L. 117-183) made several significant changes that are now fully in effect in FY2026:
Raised award caps: Phase I increased from $150,000 to $275,000; Phase II from $1,000,000 to $1,837,500
Increased set-aside percentage: Agencies must set aside 3.2% of their extramural R&D budget for SBIR (up from 3.0%)
Enhanced commercialization requirements: Companies must submit commercialization plans with Phase II applications
Updated size standards: Affiliate rules clarified to allow more VC-backed companies to participate
Frequently Asked Questions
What are the SBIR Phase I and Phase II award amounts in 2026?
In 2026, SBIR Phase I awards are capped at $275,000 for a 6-month feasibility study (previously $150,000, raised by the SBIR and STTR Extension Act of 2022). Phase II awards are capped at $1,837,500 for a 24-month R&D project (raised from $1,000,000). These are SBA-established caps — individual agencies may award less, and some agencies are authorized to make awards above the cap with justification. STTR Phase I is also capped at $275,000; STTR Phase II at $1,837,500.
Which federal agency has the largest SBIR program?
The Department of Defense (DOD) operates the largest SBIR program by dollar volume, awarding approximately $1.5 billion annually across all service branches (Army, Navy, Air Force, DARPA, MDA, and others). NIH is the second largest, awarding approximately $1.2 billion. DOE, NSF, NASA, and HHS (excluding NIH) round out the top five. By number of Phase II awards, DOD and NIH are also the leaders. Each agency manages its own solicitation schedule, topic areas, and application requirements.
What is the SBIR Phase I to Phase II transition rate?
Phase II transition rates (the percentage of Phase I awardees that go on to receive a Phase II award) vary by agency and year. Across all agencies, roughly 40–50% of Phase I awardees eventually receive a Phase II award, though this varies significantly. NIH Phase II transition rates have historically been around 40–45%. DOD rates vary by component — some DARPA programs have higher transition rates due to their structured Phase II pipeline. SBA tracks transition rates on the SBIR.gov website and agencies with low rates may face reductions in their SBIR set-aside.
Can a company receive multiple SBIR awards?
Yes. A company can receive multiple SBIR/STTR awards from different agencies simultaneously, and can receive Phase I and Phase II awards on different topics from the same agency. However, there are constraints: the same project cannot receive Phase I and Phase II funding concurrently from the same agency (must complete Phase I before Phase II on the same topic). Additionally, companies with more than $2 million in prior SBIR/STTR funding from a single agency may be subject to commercialization benchmarks. There is no hard cap on the total number of SBIR awards a company can receive.
What is SBIR Phase III and does it include additional grant funding?
SBIR Phase III is the commercialization phase — the company moves its innovation to market using private investment or non-SBIR government funding. Phase III itself has no new SBIR set-aside funding. However, Phase III is important because it allows agencies to award contracts or grants to SBIR awardees without competitive bidding (sole-source authority). This means agencies can directly fund further development or procurement of your technology without another competitive solicitation — a significant advantage for companies with proven Phase II technologies.
Editorial Notice: This article was reviewed by the GrantMetric editorial team. Federal grant programs change frequently — funding amounts, eligibility, and deadlines are subject to annual appropriations. To report an inaccuracy, contact dev@grantmetric.com.
Get Free Weekly Federal Grant Alerts
New opportunities from NIH, NSF, DOD and 40+ agencies — every Monday. Free forever.
Source: NIH RePORTER, NSF Award Database, SBA SBIR.gov — approximate figures vary by cycle and sub-program.
◆ Typical Federal Grant Application Timeline
Wk 1–4
SAM.gov Registration + UEI
Mo 1–2
Find FOA + Eligibility Check
Mo 2–4
Write Proposal + Budget
Mo 4
Submit via Grants.gov
Mo 5–9
Peer Review + Score
Mo 9–12
Award Notice + Funding
Timeline is approximate. NIH averages ~9 months; SBIR Phase I ~5–6 months; some formula grants move faster.
◆
About the Author
GrantMetric Research Team
Federal Grant Intelligence Specialists · grantmetric.com
Our analysts monitor 900+ federal grant opportunities daily across NIH, NSF, DOD, USDA, EPA and 21 other agencies. All data is sourced directly from Grants.gov, SAM.gov, and official agency solicitation portals. Content is reviewed monthly for accuracy.
📋 900+ grants tracked🏛 26 federal agencies🔄 Updated: May 2026
◆ Common Questions About Federal Grants
Who is eligible to apply for federal grants?
+
Eligibility depends on the specific grant. Most federal grants are open to nonprofit organizations, universities, state and local governments, and small businesses. Some grants (like SBIR/STTR) are exclusively for small businesses, while others (like fellowships) target individuals. Always check the Funding Opportunity Announcement (FOA) for specific eligibility requirements.
How do I apply for a federal grant?
+
To apply: (1) Register in SAM.gov and obtain a UEI number, (2) Register on Grants.gov, (3) Find a relevant Funding Opportunity Announcement (FOA), (4) Prepare your application package including project narrative, budget, and required forms, (5) Submit before the deadline. Allow at least 2–4 weeks for system registrations before your first submission.
Are federal grants free money?
+
Federal grants do not need to be repaid, but they are not unconditional. Recipients must use funds only for the approved purpose, submit progress and financial reports, comply with federal regulations, and allow audits. Misuse of grant funds can result in repayment requirements and debarment from future federal funding.
How long does it take to receive a federal grant?
+
The timeline varies by agency and program. Typically, from submission to award decision takes 3–12 months. NIH review cycles run about 9 months. SBIR Phase I awards may take 5–6 months. Some emergency or formula grants move faster. Budget for at least 6 months between application and funding receipt.
What is the difference between a grant and a cooperative agreement?
+
A grant gives the recipient substantial independence to carry out the project with minimal federal involvement. A cooperative agreement involves substantial federal agency involvement in directing or participating in the project activities. Both provide funding that does not need to be repaid, but cooperative agreements require closer collaboration with the funding agency.
GrantMetric Intelligence Systems — Independent federal grant intelligence platform. Not affiliated with Grants.gov, the U.S. Department of Health & Human Services, or any government agency. Grant data is sourced from the Grants.gov API for informational purposes only; always verify opportunity details directly with the funding agency before applying. Some links on this site are affiliate links — we may earn a commission at no additional cost to you. Full Disclaimer · Last Reviewed: May 2026 · Data Methodology
We use cookies to analyze site traffic and improve your experience. By clicking "Accept", you consent to our use of cookies as described in our Privacy Policy.
◆ Free Grant Intelligence Alerts
Get Weekly & Closing Soon Alerts
NIH, NSF, DOD + 40 agencies. Includes Daily Closing Soon notifications. Free forever.