SBIR Proposal Caps in FY2027: How Many Proposals Each Agency Allows

SBIR/STTRNon-Dilutive Funding
Written By Josiah Wegner

Quick answer

The 2026 SBIR/STTR reauthorization requires every participating agency to limit how many proposals a single company can submit, starting in fiscal year 2027. Congress did not set a number. Each agency picks its own limit and its own method: per fiscal year, per solicitation, or per topic. As of October 2026, HHS (including NIH) accepts nine applications per company per fiscal year, NSF allows two Project Pitches per company in any 12-month period, NASA's current Phase I solicitation allows two proposals per company, and the Department of War limits proposals on a per-topic basis. If your plan has been to apply to everything that looks close, the math has changed.

What the law actually says

The Small Business Innovation and Economic Security Act (S. 3971) was signed on April 13, 2026. It reauthorized SBIR and STTR through September 30, 2031, after a six-month lapse. Alongside the foreign risk changes that got most of the attention, it added a new requirement to Section 9 of the Small Business Act: proposal limits.

Here is what the provision requires:

  • Every agency must set a cap. Beginning in FY2027, each agency's SBIR/STTR program director must set a maximum number of proposals one small business can submit.

  • The agency chooses the method. The limit can apply per fiscal year, per solicitation, or per topic.

  • Same rule for everyone. The limit must apply equally to all small businesses. A strong track record does not earn a higher cap.

  • Waivers are narrow. An agency can waive the cap only for topics that are time-sensitive and urgent to its mission, with senior approval and written justification, and on no more than 5% of its topics in a fiscal year.

  • Congress is watching. Agencies must report their cap methodology to Congress, including how many small businesses are affected based on historical data.

Limits had to be in place at least 90 days before FY2027 began on October 1, 2026. That means the caps apply to the solicitations opening now.

Why Congress added caps

The caps respond to a long-running debate about so-called SBIR mills: companies that win large numbers of awards, often across many agencies, with critics arguing too few of those awards turn into products.

The data behind that debate is real, but it is contested:

  • An SSTI analysis of SBA award data from 2009 to 2019 found that 95 firms, about 0.7% of all awardees, received more than 21% of SBIR awards in that period.

  • In 2025 Senate Small Business Committee testimony, an investor stated that the top 25 DoD SBIR/STTR winners took 18% of awards over a 10-year period.

  • Defenders of frequent awardees point to DoD data showing the top winners' share fell from 16% in 2020 to 12% in 2024, and note that roughly one in five DoD winners each year is a new entrant.

Congress settled on a middle path. It dropped tougher ideas from earlier bills, such as a lifetime award cap, and instead required each agency to limit submission volume in its own way.

Current caps by agency

Each agency is implementing the requirement differently. These are the limits we could confirm as of October 19, 2026. Always check the current solicitation before you plan.

HHS and NIH: nine per fiscal year

HHS accepts a maximum of nine SBIR/STTR applications or proposals per small business per fiscal year (NIH notice NOT-OD-26-090, July 10, 2026). That count includes:

  • New Phase I, Fast-Track, and Direct to Phase II applications

  • Resubmissions of those applications

  • Contract proposals

The limit applies to the company across HHS, not separately for each NIH institute. Resubmissions count, so a company that routinely resubmits after a near miss will use up slots faster than it expects. For more detail, see our 2026 NIH SBIR/STTR program changes overview.

Department of War: per topic

Effective October 1, 2026, the Department of War set its proposal limits on a per-topic basis. The Department of the Air Force stated that starting in FY27 it will accept one proposal per topic from each company. This matters right now: DoW SBIR/STTR FY27 Release 1 opens October 28 and closes November 25, 2026. Check the BAA and each component's instructions on DSIP for the exact rule.

NSF: two Project Pitches per 12 months

NSF's current SBIR/STTR solicitation allows a maximum of two Project Pitch submissions per company in any 12-month period. It also caps Project Pitches for the same project or technology at three in total, regardless of topic. Because an invitation to submit a full proposal starts with a Project Pitch, those two slots are effectively your annual NSF Phase I budget.

NASA: two proposals per solicitation

NASA's FY26 to FY27 SBIR/STTR Phase I solicitation limited each company to no more than two proposal packages, each aimed at a single subtopic. NASA also warns that submitting similar proposals to multiple subtopics can get all of them rejected. Watch for new appendices, since limits may be set per release.

DOE and other agencies

As of this writing we have not found a published per-company limit for DOE's FY2027 Phase I releases or for the smaller SBIR agencies. Every agency is required to set one, so read the "limits" or "eligibility" section of each new solicitation before you commit a team to a proposal.

What this means for your funding plan

A cap turns each proposal slot into a scarce resource. The companies that do well under this system will be the ones that decide where to spend those slots before they start writing.

  • Count your slots across agencies. List every agency you might apply to in FY2027 and how its cap works. A company targeting NIH, NSF, and DoW is working with three different counting rules.

  • Rank opportunities by fit, not by availability. Compare each topic against your technology, stage, commercial path, and timing. A topic that is a partial match now costs you a slot you may need later.

  • Plan resubmissions in advance. At HHS, a resubmission uses a slot. Decide early whether a near miss is worth a second try or whether a different opportunity is the stronger fit.

  • Time your NSF pitches. With two pitches per rolling 12 months, a rushed pitch can lock you out of a better window later.

  • Do not plan around waivers. They are limited to urgent topics and 5% of an agency's topics per year.

  • Check related entities. If your founders or investors operate several companies, confirm how each agency treats them before you build a slate. The law does not spell this out, and agency guidance may differ.

  • Put more into fewer proposals. Fewer submissions means each one has to be better positioned: clear agency alignment, strong evidence, and a credible commercial path.

A portfolio of well-qualified pursuits can still diversify opportunity risk. The caps simply raise the cost of a poorly chosen one. BW&CO helps companies choose, sequence, and execute that portfolio. Agencies make the award decisions.

How BW&CO helps

We review funding opportunities across agencies every day and compare them against each client's technology, stage, and milestones. Under the new caps, that selection step matters more than ever. If you want help deciding where your FY2027 proposal slots should go, assess your funding path with our team.

Frequently asked questions

When do SBIR proposal caps take effect?

The law requires caps beginning in fiscal year 2027, which started October 1, 2026. HHS applied its nine-per-year limit to applications with due dates on or after April 13, 2026.

How many SBIR proposals can one company submit?

It depends on the agency. As of October 2026: HHS and NIH allow nine per fiscal year, NSF allows two Project Pitches per 12 months, NASA's current Phase I solicitation allows two proposals, and DoW limits proposals per topic, with the Air Force accepting one per topic per company.

Do resubmissions count toward the NIH limit?

Yes. The HHS limit counts new and resubmission Phase I, Fast-Track, and Direct to Phase II applications, plus contract proposals.

Is the NIH cap per institute?

No. The nine-application limit applies to the company across HHS, not separately for each NIH institute or center.

Can an agency make exceptions to the cap?

Only in narrow cases. An agency may waive its limit for topics that are time-sensitive and urgent to its mission, with senior approval, and on no more than 5% of its topics in a fiscal year.

Do experienced SBIR companies get a higher limit?

No. The law requires each agency's limit to apply equally to all small businesses, regardless of size or award history.

Program names are used for identification only. BW&CO is not affiliated with or endorsed by the sponsoring agencies. Limits reflect published agency guidance as of October 19, 2026 and may change; confirm current rules in each solicitation.

Sources

Josiah Wegner https://www.bwcoconsulting.com
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