AFWERX & SpaceWERX SBIR/STTR Reauthorization 2026

Key Changes, New Opportunities & Path Forward

Published: April 29, 2026

The five-year SBIR/STTR reauthorization is now law — and it brings some of the most significant changes the program has seen in years. From the new Strategic Breakthrough Award track offering up to $30M in sequential Phase II funding, to the expansion of Direct to Phase II (D2P2) into STTR, to tighter foreign-affiliation due diligence, the rules of engagement for small businesses working with the Department of the Air Force (DAF) and the U.S. Space Force are evolving fast.

This guide distills the key takeaways from the recent AFWERX and SpaceWERX update for innovators, founders, and acquisition professionals — what's changing, what's open right now, and what you should do in the next 30 days to stay competitive.

TL;DR — The 7 Things You Need to Know

1.     Five years of program certainty. The SBIR/STTR program is reauthorized through the next five-year window, ending the cycle of short-term extensions.

2.     D2P2 is now available for STTR. Qualified applicants can skip Phase I in both SBIR and STTR if they meet the requirements.

3.     Strategic Breakthrough Awards — a new sequential Phase II track — provide up to $30M with a 48-month maximum period of performance and a 1:1 matching-funds requirement.

4.     Tighter research security. Applicants must disclose all foreign affiliations, including venture backing and IP licenses.

5.     Proposal caps. Agencies must now set annual limits on how many Phase I proposals a single firm can submit.

6.     AFWERX has 8 topics in pre-release; opens May 5, 2026 and closes June 6, 2026.

7.     SpaceWERX has 6 topics open now (close May 13) plus more opening May 6 (close June 3).

What the 2026 SBIR/STTR Reauthorization Changes

1. Five-Year Program Certainty

The program is authorized for the next five years. This stability means clearer expectations for both agencies and small businesses — no more planning around quarterly cliff edges.

2. Direct to Phase II (D2P2) Expanded to STTR

Previously, D2P2 was an SBIR-only authority. Under the reauthorization, STTR opportunities can also support D2P2 awards, which lets qualified businesses and their research-institution partners skip Phase I entirely if they meet eligibility and feasibility requirements.

3. Enhanced Research Security & Due Diligence

The Air Force and Space Force have been at the forefront of due diligence for years, and the new law reinforces that posture program-wide. Stricter requirements now apply across both SBIR and STTR regarding foreign countries of concern. Applicants must disclose:

•      All foreign affiliations of key personnel

•      Venture backing from foreign sources

•      IP licenses tied to foreign entities

If your cap table or licensing structure has any foreign exposure, audit it now.

4. Annual Proposal Caps

Agencies are now required to set annual limits on the number of Phase I proposals a single firm can submit. The goal is to broaden the industrial base and prevent a small number of firms from dominating Phase I awards.

5. Commercialization Benchmarks & Phase III Transition

There's increased emphasis on commercial outcomes. Each agency will define how it measures commercialization impact — expect performance metrics tied to whether your technology is actually transitioning to end users.

6. FY2026 Carryover Funding

Agencies may carry over unused FY2026 SBIR/STTR funds to support new awards once the program resumes — meaning pent-up funding remains available rather than expiring.

7. Technical and Business Assistance (TABA)

Increased TABA funding now supports:

•      Cybersecurity assistance

•      I-Corps training, extended to D2P2 and Strategic Breakthrough Award recipients

8. Acquisition Workforce Training

This change affects the government side. Contracting officers and acquisition professionals across federal agencies will receive training on:

•      SBIR/STTR program goals and authorities

•      Phase III agreements and how to use them

•      Data rights protections for both companies and the government

•      Sole-source award contracts

The practical effect: small businesses are more likely to encounter contracting officers who actually understand Phase III mechanics.

Strategic Breakthrough Awards: The New $30M Track

This is the headline addition. The Strategic Breakthrough Award is not a replacement for STRATFI/TACFI. Instead, it's a new sequential Phase II vehicle designed to bridge the “valley of death” between innovation and scaled deployment.

Strategic Breakthrough Award

Element	Requirement
Maximum funding	Up to $30 million
Period of performance	48 months maximum
Matching funds	1:1 required
Match composition	At least 20% from non-SBIR/STTR sources within the Department of War; balance from outside SBIR/STTR program funds
Builds on	A previous Phase II award
Market research	Required — must demonstrate viability
Follow-on funding	Written commitment required that follow-on funding is secured

Important caveat: The full implementation plan is still pending. The DAF will follow guidance from the Office of the Secretary of War (OSW) and from SBA. Treat the table above as confirmed structural requirements, but expect detailed rollout guidance to follow.

AFWERX: Current Opportunities and Funding Priorities

What AFWERX Is Looking to Fund

AFWERX is staying tightly aligned with the broader Air Force and the Department of War's six Critical Technology Areas, which signal where warfighters need to maintain dominance. Solicitations this fiscal year will heavily emphasize these six areas plus AFWERX's own emerging-priority buckets.

Solicitation Cadence

The Department of War now sets a predictable cadence: a new pre-release on the first Wednesday of every month. AFWERX anticipates participating in all six fiscal-year releases.

Pro tip: The pre-release window is your only chance to ask topic-specific questions. Once a solicitation officially opens, the Q&A window closes.

Focused Open Topics — A Notable Shift

Both AFWERX and SpaceWERX are moving away from purely technology-agnostic open topics toward a focused open topic model — mission-driven subject areas that allow multiple innovative solutions to address a specific capability gap. If you've been waiting for completely open topics, recalibrate.

SpaceWERX: Current Opportunities and Upcoming Focus Areas

Open Now on DSIP (Close May 13, 2026)

Six SpaceWERX opportunities are currently open, including the highlighted Adaptive and Intelligent Space Challenge. Topics span:

•      Data fusion

•      Sensor technology

•      Infrastructure maturation for proliferated low-Earth-orbit constellations

Opening May 6, 2026 (Close June 3, 2026)

Two additional opportunities will release on May 6.

Upcoming Focus Areas (Release Timing Pending Implementation Guidance)

•      On-orbit space logistics — next-generation long-term space capabilities

•      Defensive cyber operations — cybersecurity and resilience for space assets; operational readiness for the Space Force

•      Cislunar space domain awareness — extending SDA beyond GEO into cislunar space

•      Novel sensing for ground and space — emerging sensing techniques to improve data quality

STRATFI (Strategic Funding Increase Program)

A SpaceWERX STRATFI opportunity is currently open and scheduled to close May 29, 2026.

Upcoming AFWERX & SpaceWERX Events

A non-exhaustive list of public events where you can engage with the teams:

Late April 2026

•      SSC Cyber Expo (April 28)

•      North American–Lithuanian Edison Space Forum at The Bridge

•      Launch Pad session and SBIR Reauthorization Party at The Bridge (April 30)

May 2026

•      Phase III for Government Personnel Webinar (May 7)

•      SSC Subcontracting Forum at The Bridge (May 13)

•      SOFIC, Tampa, FL (May 18–21)

•      Virtual SpaceWERX for Industry Webinar (May 21)

•      SpaceTech Economic Forum at The Bridge (May 21)

June 2026

•      Industry Dialogue Day with SSC (Virtual, June 30)

July 2026

•      Innovate 2026, Huntsville, AL (July 21–23) — rapid capability delivery and missile defense focus

How to Prepare While Implementation Guidance Drops

Even with parts of the implementation plan still TBD, there are five concrete moves every prospective applicant should be making right now.

1. Audit Your Foreign Ties

The new law expands and reinforces due diligence. Review:

•      Cap table

•      IP licenses

•      Affiliations of key personnel — leadership, team members, board

•      Connections to any foreign country of concern

2. Update Your Federal Registrations

Make sure these are active and current — before a solicitation closes:

•      SAM.gov profile and UEI

•      DSIP profile

•      SBIR.gov profile

AFWERX and SpaceWERX cannot fast-track issues with SAM.gov on your behalf. Don't leave registration housekeeping for the final 48 hours of a submission window.

3. Refresh Your Value Proposition

Align your R&D narrative with current Air Force and Space Force priorities — which shift meaningfully every six months. The DAF publishes priorities through videos and on its websites; check what's current this month.

4. Gather Market-Based Evidence

You'll need proof that your technology solves a specific customer problem. Start collecting:

•      End-user validation

•      Commercial demand signals

•      Comparable adoption data

This will matter when commercialization-benchmark guidance lands.

5. Identify Matching-Fund Partners Now

If you plan to pursue STRATFI, TACFI, or Strategic Breakthrough Awards, start the conversation with potential matching-fund sources today. These can be:

•      Private venture capital

•      Non-SBIR/STTR government funds

•      Strategic corporate partners

Frequently Asked Questions

What is the single most important thing for first-time SBIR applicants to get right?

Pay attention to the stated maximum period of performance in your topic's solicitation. Proposals exceeding the stated maximum duration will not be evaluated.

Is there a predictable calendar for when major SBIR/STTR topics drop?

Yes. New topics drop on the first Wednesday of every month, following the Department of War's schedule. AFWERX and SpaceWERX intend to participate in all six FY2026 releases.

What format changes should we expect in proposal packages?

Format changes are minimal. Volumes 1–7 remain. There are some new requirements around CMMC and due diligence, but the underlying disclosure structure isn't changing.

Will the program shift from technology-agnostic open topics to focused open topics?

Yes. AFWERX and SpaceWERX are transitioning to a focused open topic model — mission-driven subject areas that still allow multiple solutions within a defined capability gap.

Can a foreign national submit a proposal?

Generally, no. All applicants must be at least 51% owned by U.S. citizens or U.S. lawful permanent residents. Wholly foreign-owned firms aren't eligible, but they're encouraged to partner with eligible U.S. companies.

Are U.S. companies that operate R&D abroad eligible if they're moving R&D to the U.S.?

Yes, provided all SBIR/STTR dollars are spent in the U.S. unless otherwise exempted. Non-U.S. spending must be covered by other (non-SBIR/STTR) funds.

Will CMMC requirements change for upcoming solicitations?

The CMMC level required will be specified on each solicitation. Until November 10, 2026, where applicable, solicitations will accept Level 1 or Level 2 self-assessments.

Which federal agencies run SBIR/STTR programs?

Any federal agency with an R&D budget over $100M is required to run an SBIR program. That includes the Department of War (Air Force, Army, Navy, etc.), Department of Energy, NASA, USDA, NSF, and others.

How does SpaceWERX ensure Phase II and Phase III efforts transition to real end users?

SpaceWERX uses a cohort model that gives Phase II awardees access to additional resources to improve transition success. Examples include TacRS, AltPNT, and Sustained Space Maneuver cohorts (summarized at spacewerx.us).

Will AFWERX and SpaceWERX publish a calendar of upcoming opportunities?

Yes — opportunities will be posted to the AFWERX and SpaceWERX websites and, authoritatively, to DSIP as soon as they're publicly released.

How can a prime contractor suggest topics?

Primes cannot submit topics directly. They can continue to work with their end-customer program offices to shape topic ideas — the program office must own and submit the topic based on a validated requirement.

How many awards will AFWERX make per year across Phase I, Phase II, and D2P2?

Specific FY2026 numbers depend on final budget guidance. The directional shift is toward more Phase II awards (including expanded D2P2 in both SBIR and STTR) to push more capital and capability faster.

What does the AFWERX competitive landscape look like?

Over the last two fiscal years, AFWERX has received 10,000–12,000 proposals annually. Awards were approximately 1,200 last year and 1,800 the year before. Total award volume tracks with the SBIR budget, which is set at 3.3% of DAF R&D.

Where are AFWERX and SpaceWERX physically located?

AFWERX: Dayton, OH; Washington, D.C.; Eglin AFB, FL; Austin, TX. SpaceWERX is headquartered in Los Angeles, CA.

What does it take to be a real D2P2 candidate beyond AFRL interest?

You need demonstrated technical feasibility from non-SBIR/STTR-funded efforts. D2P2 expects technologies already at a feasibility level that justifies skipping Phase I — unlike traditional Phase I, which assumes no incoming feasibility.

How will the program execute on a shortened FY2026 timeline?

Expect fewer total releases in FY2026, but each release will follow the standard cadence — including roughly one-month pre-release and one-month open windows.

How do we apply for Phase III?

You don't apply for Phase III. Phase III is a sole-source authority that a contracting officer uses to issue a direct award based on prior SBIR Phase I or Phase II work. The funds come from non-SBIR sources — usually a transition partner or end user. If your customer wants to continue the work, they can issue a direct award using Phase III as the sole-source justification.

Key Resources

•      AFWERX: afwerx.com

•      SpaceWERX: spacewerx.us

•      DSIP Portal: review opportunities and submit proposals

•      SBIR.gov: authoritative source for solicitations across federal agencies

•      SBA Policy Directive: implementation guidance from the U.S. Small Business Administration at sbir.gov/about/policies

•      LinkedIn: follow AFWERX and SpaceWERX for real-time updates on AMAs, webinars, and opportunity drops

The Bottom Line

The 2026 reauthorization signals a more disciplined, more strategic SBIR/STTR program — one focused on transition, commercialization, and research security. The Strategic Breakthrough Award changes the math for late-stage Phase II companies, D2P2 in STTR opens a faster lane for university-partnered teams, and tightened due diligence raises the floor on what “ready to submit” actually looks like. If you're a small business or research partner planning to engage AFWERX or SpaceWERX in 2026: audit, register, align, and partner — now. The next solicitation cycle is already in pre-release.