Congress to reauthorize reformed Pentagon innovation grants after Paul drops opposition – DefenseNews.com
Correction:A previous version of this article misstated some of the penalties for companies for missing benchmarks under the new legislation. The story has been edited to clarify the penalties.
This story was updated on Sept. 21, 2022 at 10:14 AM after the Senate passed the bill.
WASHINGTON Congress could pass legislation as soon as this week to reauthorize a small business innovation grant program favored by the Pentagon after reforms addressing concerns over the abuse of the rewards process persuaded Sen. Rand Paul, R-Ky., to drop his opposition to the program.
Paul told Defense News on Tuesday that he will not block a unanimous consent request for the Senate to pass the bill reauthorizing the Small Business Administrations Small Business Innovation Research and Small Business Technology Transfer awards for three years.
Those programs are set to expire by the end of the month.
We were happy to get some reforms in it, the Kentucky Republican said.
Paul had used his clout as the top Republican on the Small Business Committee to block reauthorization of the program. The 43-page compromise legislation, first seen by Defense News, is the product of months of negotiations meant to assuage Pauls concerns.
The reauthorization bill includes new provisions to address ties between some program awardees and China, while adding additional performance benchmarks aimed at commercializing projects to attract more private capital investment.
Senate Small Business Committee Chairman Ben Cardin, D-Md., told Defense News that he filed the reauthorization bill Tuesday, and the Senate passed it by unanimous consent shortly thereafter. The House is expected to easily pass the bill as soon as this week under expedited procedures.
The Defense Department accounts for the majority of the SBIR and STTR awards, which ballooned to nearly $3.3 billion in 2011. The program is awarded jointly by 11 federal agencies, and individual awards range from tens of thousands of dollars to more than $1 million for a two-year grant.
The programs incentivize small businesses to engage in early-stage research and development for technologies and products that companies might otherwise shy away from given uncertain returns on investments.
SBIR grants that were awarded by the Air Force to AeroVironment led to the development of the small, kamikaze Switchblade drones, which the United States has sent to Ukraine as it fends off Russias invasion. The Pentagon also relies on SBIR and STTR grants to spur technologies in fields such as artificial intelligence, data processing and munitions development.
Still, Paul had argued that the two programs lacked protections against China gaining access to U.S. technology and that some companies rely entirely on the grants to sustain themselves without spinning off new businesses or products.
Chinese state-sponsored companies have targeted U.S. firms that receive the grants, hoping to benefit from the investments. A 2021 Pentagon report on a small sample of SBIR awardees found China was the ultimate beneficiary of the grants, not the United States.
Under the reauthorization bills new guidelines, SBIR or STTR applicants must now disclose whether the company has ties to any foreign country of concern, including the Peoples Republic of China. The Defense Department and other agencies must deny awards to applicants that have ties to Chinese companies or have high-level employees that are part of a malign foreign talent recruitment program.
The bill requires each federal agency that awards the grants to coordinate with the Small Business Administration in the creation of a due diligence program to assess security risks presented by small business concerns seeking a federally funded award.
The Small Business Administration and the White Houses Office of Science and Technology must also consult with the Committee on Foreign Investment in the United States to establish best practices to guide these due diligence programs.
Additionally, the enhanced performance benchmarks differentiate between Phase I and Phase II SBIR and STRR grants. Under the program, Phase I awards range from $50,000 to $250,000 for six to 12 months. Phase II awards range from $750,000 to nearly $2 million for two years. There are also direct to Phase II awards, which allow companies to receive Phase II grants without first competing Phase I research.
The new legislation doubles the minimum performance standards for each small business that receives more than 50 Phase I grants within five years.
Additionally, a small business that has received more than 50 Phase II awards within the past 12 years must garner an average of $250,000 of aggregate sales and investments for each of those awards. And a company with more than 100 Phase II awards within the past 12 years must earn an average of $450,000 in aggregate sales and investments.
If a company does not meet these standards, then it may not receive more than 20 total SBIR and STTR Phase I and direct to Phase II awards for one year per agency. They may still receive unlimited Phase II awards.
Bryant Harris is the Congress reporter for Defense News. He has covered U.S. foreign policy, national security, international affairs and politics in Washington since 2014. He has also written for Foreign Policy, Al-Monitor, Al Jazeera English and IPS News.
- Rand Paul Set To Join Dems To Force Trump To Go Through Congress If He Wants To Declare War Against Venezuela - Latin Times - December 2nd, 2025 [December 2nd, 2025]
- Nancy Maces Political Consultant Resigns Over Her Closeness With Rand Paul, Thomas Massie, Saying Trump Should Not Endorse Her - The New York Sun - December 2nd, 2025 [December 2nd, 2025]
- Trump touts GOP unity while slamming Marjorie Taylor Greene, Thomas Massie and Rand Paul - New York Post - November 24th, 2025 [November 24th, 2025]
- Sen. Rand Paul says he has been given "zero, not one briefing" about Venezuelan actions - CBS News - November 24th, 2025 [November 24th, 2025]
- Trump online threats, posture toward Venezuela posture draw criticism from Sen. Rand Paul - WUKY - November 24th, 2025 [November 24th, 2025]
- Rand Paul Again Slams Trump Admin Over Campaign Against Venezuela: 'If It's War, Declare It' - Latin Times - November 24th, 2025 [November 24th, 2025]
- Senator Rand Paul weighs in on Kentucky hemp, effects of the government shutdown and the improvements of it - WDRB - November 23rd, 2025 [November 23rd, 2025]
- 'His Movement Will Dissolve': Rand Paul Warns Trump That 1 Decision Could Ruin Him - Yahoo - November 23rd, 2025 [November 23rd, 2025]
- Rand Paul Slams Alcohol And Marijuana Interests Over Federal Hemp Ban, Announcing He'll File A Bill To Reverse It Next Week - Marijuana Moment - November 23rd, 2025 [November 23rd, 2025]
- 'His Movement Will Dissolve': Rand Paul Warns Trump That 1 Decision Could Ruin Him - HuffPost - November 23rd, 2025 [November 23rd, 2025]
- Rand Paul Eyes Returning Hemp Policy To The States - Law360 - November 23rd, 2025 [November 23rd, 2025]
- 'The nanny state' | Sen. Rand Paul pitches restoring power to the states to regulate hemp - WHAS11 - November 23rd, 2025 [November 23rd, 2025]
- Rand Paul: Congress Is 'Afraid of the President' - Reason Magazine - November 23rd, 2025 [November 23rd, 2025]
- Rand Paul doubts there will be Earth-shattering details in Epstein files | CUOMO - Yahoo - November 23rd, 2025 [November 23rd, 2025]
- Rand Paul Slams Strikes Against Alleged Drug Vessels, Claims It's Unclear Whether They Are Heading To The U.S. - Latin Times - November 23rd, 2025 [November 23rd, 2025]
- Rand Paul Slams GOP's Shift From Fiscal Conservatism: They Voted To Add '$5 Trillion' To The Debt Ceiling Calls It 'Decimation' - Intel (NASDAQ:INTC)... - November 23rd, 2025 [November 23rd, 2025]
- Rand Paul: The government is open, but a hemp industry shutdown has just begun | Opinion - The Courier-Journal - November 14th, 2025 [November 14th, 2025]
- Rand Paul warns McConnell-backed provision will regulate hemp industry to death - LINK nky - November 14th, 2025 [November 14th, 2025]
- Rand Paul warns McConnell-backed provision will regulate hemp industry to death - the-messenger.com - November 14th, 2025 [November 14th, 2025]
- Senator Rand Paul threatens to delay government reopening over hemp language - The Independent - November 11th, 2025 [November 11th, 2025]
- Black Tie CBD Stands with Senator Rand Paul to Defend the Future of Legal Hemp and THCA Products - Reuters - November 11th, 2025 [November 11th, 2025]
- Rand Paul wants hemp vote to speed up shutdown endgame - Politico - November 11th, 2025 [November 11th, 2025]
- Republican Senator Uses Trump Post to Dunk on Rand Paul: Common Sense Is Illegal - Yahoo - November 11th, 2025 [November 11th, 2025]
- Rand Paul demands vote on hemp amendment before proceeding with tally to open government - Washington Examiner - November 11th, 2025 [November 11th, 2025]
- Itll take them 5 days': Rand Paul could be obstacle to quickly ending shutdown - Politico - November 10th, 2025 [November 10th, 2025]
- Republican Senator Uses Trump Post to Dunk on Rand Paul: Common Sense Is Illegal - Mediaite - November 10th, 2025 [November 10th, 2025]
- Trump Drags Rand Paul for Blocking Bill to Withhold Pay From Senators: He Wanted to Be Paid! - Yahoo - November 10th, 2025 [November 10th, 2025]
- U.S. Sen. Rand Paul hopeful ongoing discussions will end government shutdown - WCHS - November 10th, 2025 [November 10th, 2025]
- RAND PAUL: THE SWAMP SMILES FOR EVERY CONCESSION MADE BY THE GOP "Tonight the process of opening the govt begins. Less chaos is a good thing but... - November 10th, 2025 [November 10th, 2025]
- Rand Paul Again Warns Against Regime In Venezuela: 'Risks Empowering The Very Cartels We Are Trying To Defeat' - Latin Times - November 10th, 2025 [November 10th, 2025]
- Rep. Thomas Massie announces marriage to former staffer of Sen. Rand Paul - WLWT - November 5th, 2025 [November 5th, 2025]
- Senators Tim Kaine and Rand Paul on Tariffs and U.S. Trade - C-SPAN - November 5th, 2025 [November 5th, 2025]
- Rep. Thomas Massie announces his marriage to former staffer of Rand Paul - WAVE News - November 5th, 2025 [November 5th, 2025]
- Rep. Thomas Massie marries ex-Rand Paul staffer a year after wifes death: Of course we served raw milk! - New York Post - November 5th, 2025 [November 5th, 2025]
- Sen. Rand Paul blasts health care subsidies for rich people as shutdown drags on - Fox Business - November 5th, 2025 [November 5th, 2025]
- Civilized People Dont Do This! Rand Paul Torches Trumps Insane Strikes on Alleged Drug Boats - Yahoo - November 5th, 2025 [November 5th, 2025]
- Opinion - Bill Straub: Rand Paul shows backbone in recent efforts to kill Trump's damaging tariff policy - NKyTribune - November 3rd, 2025 [November 3rd, 2025]
- Kentucky Senator Rand Paul urges compromise to open government - WAVE News - October 30th, 2025 [October 30th, 2025]
- Rand Paul Takes to Fox News Sunday to Condemn Trump Over Shutdown Gridlock, Extrajudicial Killings On Suspected Drug Boats - Yahoo - October 30th, 2025 [October 30th, 2025]
- How Rand Paul says Congress can work together to end government shutdown - The Courier-Journal - October 28th, 2025 [October 28th, 2025]
- PolitiFact FL: Is Rand Paul right 25% of Coast Guard searches of suspected drug boats come up empty? - WLRN - October 28th, 2025 [October 28th, 2025]
- Sen. Rand Paul calls for immediate action to pay federal employees and end shutdown - LEX18 - October 28th, 2025 [October 28th, 2025]
- US warships in Caribbean, Rand Paul reaction - WPSD Local 6 - October 28th, 2025 [October 28th, 2025]
- Rand Paul Pitches Novel Shutdown-Solving Idea to Trump - NOTUS News of the United States - October 28th, 2025 [October 28th, 2025]
- GOP Sen. Rand Paul Again Slams Trump Admin Over Strikes Off Venezuelan Coast: 'Akin To What China, Iran Do' - Latin Times - October 28th, 2025 [October 28th, 2025]
- 'They are afraid': Rand Paul thrashes fellow Republicans for not having the 'guts' to stand up against Trump in fear of being ostracized - The Mary... - October 28th, 2025 [October 28th, 2025]
- Rand Paul: "In the one instance you're killed on sight. On the other instance, if you're captured, we just say, 'Oh well, we're gonna send you... - October 26th, 2025 [October 26th, 2025]
- Rand Paul Says 20 GOP Senators Are Grumbling Over Trump Policy But Dont Have the Guts to Criticize the President - Yahoo - October 26th, 2025 [October 26th, 2025]
- Recipe for Chaos: Rand Paul Piles on More Harsh Trump Criticism After Being Called Nasty Liddle Guy - Yahoo - October 26th, 2025 [October 26th, 2025]
- Colin McEnroe (opinion): Chasing unity with Rand Paul and Aaron Rodgers - CT Insider - October 26th, 2025 [October 26th, 2025]
- SEN. RAND PAUL: TRUMP IS CARRYING OUT SUMMARY EXECUTIONS OF VENEZUELANS "I would call them extrajudicial killings. This is akin to what China... - October 26th, 2025 [October 26th, 2025]
- Rand Paul on Trump's strikes on boats: "I would call them extrajudicial killings. This is akin to what China does, what Iran does with drug... - October 26th, 2025 [October 26th, 2025]
- Rand Paul Trashes Republicans for Always Caving to Trump - The New Republic - October 24th, 2025 [October 24th, 2025]
- Rand Paul: Trump could see all hell break loose with further involvement in Ukraine, Venezuela - Yahoo - October 24th, 2025 [October 24th, 2025]
- GOP Senator Rand Paul Cut From Fancy White House Lunch for Voting Against Trump - The Daily Beast - October 24th, 2025 [October 24th, 2025]
- Rand Paul pokes back at Trump after snub from White House reception - USA Today - October 23rd, 2025 [October 23rd, 2025]
- Rand Paul says he was not invited to Rose Garden lunch - Politico - October 23rd, 2025 [October 23rd, 2025]
- Rand Paul Slams Trump Admin For Strikes On Alleged Drug Boats: 'It's Summary Execution!' - HuffPost - October 23rd, 2025 [October 23rd, 2025]
- Rand Paul Again Slams Trump Over Strikes On Alleged Drug Boats Off Venezuela: 'A Lot Of Reasons To Be Worried' - Latin Times - October 23rd, 2025 [October 23rd, 2025]
- Sen. Rand Paul says he was not invited to Republican luncheon - WNKY - October 23rd, 2025 [October 23rd, 2025]
- Sen. Rand Paul to Newsmax: Persistent Critic of Overspending - KABC-AM - October 23rd, 2025 [October 23rd, 2025]
- Rand Paul visits Johnson County to talk Eastern Kentucky tourism - Mountain Top Media - October 23rd, 2025 [October 23rd, 2025]
- Rand Paul: 'All of these people have been blown up without us knowing their name' - Politico - October 21st, 2025 [October 21st, 2025]
- Kentucky Sen. Rand Paul explains why he is voting against spending bill - WDRB - October 21st, 2025 [October 21st, 2025]
- Rand Paul responds to Trump post calling him a 'nasty' guy. What he said on 'Meet the Press' - The Courier-Journal - October 21st, 2025 [October 21st, 2025]
- Rand Paul Awkwardly Confronted About Trump Calling Him a Nasty Liddle Guy - Yahoo - October 21st, 2025 [October 21st, 2025]
- Rand Paul Thought He Could Get Away with Bucking Trump. He Was Wrong. - NOTUS News of the United States - October 21st, 2025 [October 21st, 2025]
- Rand Paul Responds Humbly to Trump Calling Him 'Nasty Little Guy': 'Still One of His Best Supporters' | Video - TheWrap - October 21st, 2025 [October 21st, 2025]
- Rand Paul Again Slams Trump Over Military Pressure On Venezuela: 'Regime Change Isn't Always What You Expect' - Latin Times - October 21st, 2025 [October 21st, 2025]
- Donald Trump posted a vicious attack on Rand Paul, but it hasnt scared the loyal senator away. - Yahoo - October 21st, 2025 [October 21st, 2025]
- Sen. Rand Paul questions legality of Trump administrations strikes on alleged drug traffickers - Washington Times - October 21st, 2025 [October 21st, 2025]
- Kentucky US Sen. Rand Paul explains why he is voting against spending bill - WDRB - October 21st, 2025 [October 21st, 2025]
- Rand Paul says he will support paying federal employees but not ending shutdown: Full interview - Yahoo - October 21st, 2025 [October 21st, 2025]
- Sen. Rand Paul says Caribbean boat strikes 'go against all of our tradition' - NBC News - October 19th, 2025 [October 19th, 2025]
- Sen. Rand Paul introduces tourism project for EKY - WKYT - October 19th, 2025 [October 19th, 2025]
- Senator Rand Paul highlights new tourism initiative to boost Eastern Kentucky economy - LEX18 - October 19th, 2025 [October 19th, 2025]
- EXCLUSIVE INTERVIEWS WITH UKRAINIAN PRESIDENT VOLODYMYR ZELENSKYY, SEN. RAND PAUL AND SEN. TIM KAINE THIS SUNDAY ON MEET THE PRESS WITH KRISTEN WELKER... - October 19th, 2025 [October 19th, 2025]
- Trump Slams Rand Paul After He Moves To Block Military Pressure Campaign Against Venezuela: 'Nasty Liddle' Guy' - Latin Times - October 19th, 2025 [October 19th, 2025]
- Senator Rand Paul announces new organization to focus on Eastern Kentucky tourism - WOWK 13 News - October 17th, 2025 [October 17th, 2025]
- Rand Paul COVID vaccine theories aren't helping to bridge public health divide | Opinion - Yahoo - October 15th, 2025 [October 15th, 2025]