Air Force SBIR/STTR

Air Force SBIR Phase II

Supports United States Air Force-aligned projects maturing defense-ready prototypes toward broader mission adoption.

Air Force SBIR Phase II is the technology development and prototyping stage for companies that have completed an Air Force SBIR Phase I award, or accessed the program via the Direct-to-Phase II pathway widely offered by AFWERX. The program is managed by AFWERX as the Department of the Air Force's SBIR/STTR program manager, operating under the Air Force Research Laboratory. SpaceWERX manages space-focused Phase II awards in partnership with Space Systems Command. The program was reauthorized through FY2031 under legislation signed April 13, 2026. Since 2019, AFWERX and SpaceWERX have collectively awarded over 10,400 contracts worth more than $7.24 billion, building a portfolio of 3,379 companies with 45 percent new to government.

Standard Phase II awards are up to $2,153,927 (SBA statutory cap as of October 2024) over 24 months. AFWERX offers two Phase II Enhancement tracks for companies ready to transition to operational use. STRATFI (Strategic Funding Increase) matches SBIR Phase II funds with DoD program-of-record dollars and private capital, with matched awards ranging from $3 million to $15 million for high-priority technology transitions. TACFI (Tactical Funding Increase) is a smaller enhancement track for tactical-level transitions. Both require a DoD program-of-record customer commitment. The small business must perform at least half of Phase II work, with outsourcing up to 50 percent permitted. In FY25, Air Force SBIR/STTR generated 438 Phase III transitions valued at $8.1 billion.

Eligibility is limited to U.S.-registered for-profit small businesses with 500 or fewer employees, majority-owned by U.S. citizens or permanent residents. VC-majority ownership is permitted under SBA Section 5107. All R&D must be performed in the United States. Proposals are submitted through the DSIP portal (dodsbirsttr.mil) and evaluated by AFRL subject-matter experts via merit review. Phase II awardees are positioned for Phase III transition to DAF acquisition programs, SpaceWERX mission partners, or commercial markets.