As of October 16, 2026, a Small Business Innovation Research (SBIR) Phase I award can reach $335,937 and a Phase II award $2,239,578 without a waiver from the Small Business Administration (SBA), according to sbir.gov. Most agencies pay less: the Air Force now lists Phase I at up to $323,000 and Phase II at up to $2.1 million.
Those are ceilings, not typical checks. Each agency, and each component inside the Department of Defense (DoD), which has also styled itself the Department of War since September 2025, sets its own amount topic by topic. This guide puts the SBA limits, the Pentagon amounts and the newer funding layers in one place, with the source for every figure.
SBIR award amounts by phase (2026)
The table below is the short answer. Amounts include modifications. Durations are the "normal" periods in the SBA policy directive; agencies may set longer or shorter ones in a solicitation.
| Phase | What it funds | Maximum without SBA waiver | Normal duration | Key rule |
|---|---|---|---|---|
| Phase I | Feasibility study, proof of concept | $335,937 (from Oct 16, 2026) | 6 months (SBIR), 1 year (STTR) | Agencies may pay less; topic sets the amount |
| Phase II | Prototype and R&D | $2,239,578 (from Oct 16, 2026) | 2 years | Usually requires a Phase I, unless Direct to Phase II |
| Phase III | Production, commercialization | No dollar limit | No limit | Funded with non-SBIR money; can be sole source |
| Strategic Breakthrough (new in 2026) | Scaling a proven Phase II technology | $30M | Up to 48 months | 100% match from new private or non-SBIR federal money |
| Technical and business assistance (TABA) | Outside help: IP, regulatory, cybersecurity, market | $6,500 (Phase I), $50,000 (Phase II) | Per project | Included in or added to the award |
Sources: Phase I and II ceilings from sbir.gov; durations and Phase III rules from the SBA SBIR/STTR Policy Directive effective May 3, 2023; Strategic Breakthrough and TABA amounts from Public Law 119-83, signed April 13, 2026.
How much is an SBIR Phase 1 award?
The legal ceiling is $335,937, but the real number is whatever the topic says. The SBA policy directive sets a baseline guideline of $150,000 for Phase I and $1,000,000 for Phase II, lets agencies go up to 50% above it, and has SBA adjust the amounts every year for inflation. The October 2026 figures on sbir.gov are the result: above them, an agency needs an SBA waiver for that topic.
In practice the range is wide. The National Science Foundation pays up to $305,000 for a Phase I that runs 6 to 18 months, under its NSF 26-510 solicitation. The Air Force, through AFWERX, lists Phase I at up to $323,000 for up to six months on its Get Funded page. Until recently the Air Force Open Topic paid far less, as the next section shows.
The AFWERX $75,000 Phase I, and what replaced it
Founders still search for "AFWERX Phase 1 $75,000" because that was the standard Open Topic award for years. The AFWERX program overview dated January 22, 2026 still listed two tracks:
| AFWERX track | Phase I | Phase II |
|---|---|---|
| Open Topic (technology-agnostic, until early 2026) | Up to $75K ($110K for STTR), 3 months, about 700 awards a year | Up to $1.25M ($1.8M for STTR), up to 21 months, about 300 awards a year |
| Specific Topic (defined Air Force customer) | Up to $180K, 6 months, about 300 awards a year | Up to $1.8M initial award, up to 24 months, about 200 awards a year |
| FY2027 releases (current Get Funded page) | Up to $323,000, up to 6 months | Up to $2.1M, up to 24 months |
After the 2026 reauthorization, AFWERX and SpaceWERX said they were "transitioning to a focused open topic model" that replaces technology-agnostic topics with mission-driven subject areas, and that there "will be a decrease in the number of Open Topic opportunities," according to the AFWERX webinar Q&A of April 22, 2026. The same document says the Department of the Air Force is "pivoting to more Phase II awards" and aiming at higher dollar values. Our step-by-step AFWERX application guide covers the current windows.
How much is an SBIR Phase 2 award?
The ceiling without a waiver is $2,239,578 as of October 16, 2026. The Air Force lists up to $2.1 million over up to 24 months; NSF pays up to $1,250,000, typically over 24 months. Army and Navy amounts are set in each topic of the DoD solicitations on the DoD SBIR/STTR Innovation Portal (DSIP).
A real example: on April 15, 2026, two days after the reauthorization was signed, the Army started a Direct to Phase II contract with Deepnight, the night-vision software startup, worth up to $1,999,605 over two years, according to the federal award record. Direct to Phase II lets a company with a feasibility result from outside the program skip Phase I.
SBIR Phase 1 vs Phase 2: the differences that matter
- Purpose. Phase I asks "is it feasible?"; Phase II pays for a prototype with a government technical point of contact and end user.
- Money. The ceiling rises about 6.7 times, from $335,937 to $2,239,578.
- Time. Six months is normal for SBIR Phase I (one year for STTR); two years for Phase II.
- Entry. Phase II normally goes to Phase I awardees. At the Air Force, a Direct to Phase II needs "an identified DAF customer and end user, and a signed Customer Memorandum."
- Odds. AFWERX said it received about 10,000 to 12,000 proposals a year over the last two fiscal years and made about 1,200 to 1,800 awards a year, per its April 2026 Q&A.
Is there a limit on SBIR Phase 3?
No. The policy directive states that "there is no dollar limit associated with Phase III SBIR/STTR awards." Phase III is work that derives from, extends or completes an earlier SBIR or STTR award, funded with money from outside the SBIR budget. AFWERX describes it as a "sole source authority" a contracting officer can use, not a contract you apply for.
Two rules make Phase III valuable. First, an agency that wants to continue the work with the original awardee does not need a new competition: the Phase I and II competitions satisfy it. Second, SBIR data rights apply, and the protection period "ends not less than twenty years" from the award, per the directive. The April 2026 law also orders SBA to train contracting officers on Phase III, including data rights and sole source awards.
STRATFI, TACFI and the $30 million Strategic Breakthrough award
Between Phase II and a production contract sits a layer of matched funding. The Air Force lists three options on its Get Funded page:
| Program | SBIR/STTR funds | Match required | Duration |
|---|---|---|---|
| TACFI | $375K to $2M | 1:1 | Up to 24 months |
| STRATFI | $3M to $15M | $6M to $45M of government or private money | Up to 48 months |
| Strategic Breakthrough | Up to $30M | 1:1; at DoD at least 20% of the match from non-SBIR DoD program funds | Up to 48 months |
STRATFI has backed several companies in our directory. Starfish Space cites a $37.5 million Space Force STRATFI in its April 7, 2026 release. On August 21, 2026, SpaceWERX named 11 companies for its 2026 STRATFI cohort, worth $562.5 million including $245 million of private capital, according to Payload; they include Agile Space Industries, Muon Space, Scout Space, Star Catcher and ThinkOrbital. More of them are listed among the space and ISR startups in our directory.
The Strategic Breakthrough award is new. Section 3 of Public Law 119-83 lets an agency that must spend more than $100 million a year on SBIR use up to 0.50% of its extramural R&D budget for awards of up to $30 million, to companies with at least one prior Phase II. At DoD the company also needs a commitment for inclusion in a program objective memorandum and must show at least 20% of the match comes from new DoD money. Agencies must complete the contract within 90 days of receiving the proposal. As of November 14, 2026, we found no public announcement of a Strategic Breakthrough award; see our guide to the 2026 SBIR reauthorization for the full rules.
How much has DoD spent on SBIR?
DoD's all-time SBIR and STTR investment exceeds $41 billion, across about 80,000 awards to roughly 14,000 small businesses, according to figures cited by DefenseScoop on April 29, 2026. Across government, SBA's annual report counted $4.4 billion of SBIR and $662.3 million of STTR awards in fiscal 2022, per the Congressional Research Service. At the Air Force, the SBIR budget is 3.3% of the Department of the Air Force R&D budget, AFWERX says.
For a founder, the money ladder matters more than the totals. A typical path is a Phase I of a few hundred thousand dollars, a Phase II of up to about $2 million, a matched TACFI or STRATFI, then a Phase III production contract. Vermeer, the New York GPS-free navigation startup, reported more than $7 million in SBIR and AFWERX awards after joining the Air Force accelerator run with Techstars, per DroneLife in October 2025. Defense programs that do not run through SBIR, such as the Defense Innovation Unit, follow a different path: see our Defense Innovation Unit CSO guide.
Checklist before you price a proposal
- Read the amount and period of performance in the topic itself, not in a summary: AFWERX says exceeding the stated maximum period of performance is "the number one grounds for disqualification."
- Check whether the topic offers Phase I, Direct to Phase II, or both.
- Budget TABA: up to $6,500 in Phase I and $50,000 in Phase II, if the agency allows it inside or on top of the award.
- Plan the match early if you are aiming at TACFI, STRATFI or Strategic Breakthrough funding.
- Browse SBIR-funded companies in the America Defense Tech directory to see how peers moved from Phase I to production.
