Two cornerstone authorities for federal contracting quietly expired on September 30, 2025, creating ripple effects that contractors—small and large—cannot afford to overlook.  The Small Business Innovation Research/Small Business Technology Transfer (“SBIR/STTR”) programs, commonly known as “America’s Seed Fund” for their role in fueling early-stage innovation, and the Defense Production Act (“DPA”), the backbone of the government’s ability to prioritize contracts and strengthen the industrial base, both lapsed at the close of the fiscal year.  Although lawmakers have floated temporary or long-term fixes in pending legislation, nothing has yet been enacted.  The simultaneous government shutdown further complicates the picture, making new awards unlikely in the near term and magnifying uncertainty for contractors who rely on these authorities.

As of September 30, 2025, the SBIR and STTR program authorities expired (15 U.S.C. 638).  Lawmakers in both chambers of Congress have introduced bills ranging from short-term extensions to proposals that would make the programs permanent and broaden their features, but none have advanced.  The legislative vehicles most likely to move in the near term—the National Defense Authorization Act (“NDAA”) for Fiscal Year 2026 and a continuing resolution (“CR”)—offer no relief.  Both the House- and Senate-passed versions of the NDAA include multiple SBIR/STTR-related provisions, but none address the statutory sunset.  Likewise, the CR that cleared the House in mid-September contained no SBIR/STTR extension.

Further, as of September 30, 2025, most provisions of the DPA also expired (Chapter 55 of title 50, U.S.C.), leaving critical authorities—such as the power to issue priority ratings for contracts (Title I) and to provide targeted financing and investment support for industrial base projects (Title III)—in limbo (some DPA sections, such as the CFIUS statute, remain in force).  The lapse in DPA authority is already having practical consequences.  For example, after the federal Government announced plans to acquire a 10% stake in minerals explorer Trilogy Metals, Inc., the company disclosed that the investment would not close until “following the reauthorization of the Defense Production Act by the United States Congress,” highlighting the direct impact of the lapse on transaction timing.  

The Senate-enacted version of the NDAA includes a bi-partisan provision that would reauthorize the DPA.  In addition, the House-passed CR would temporarily extend DPA’s sunset to the CR’s end date.  But neither the NDAA nor the CR has been enacted in law, meaning no DPA extension is currently in place. 

These lapses mean agencies are unable to issue new SBIR/STTR or DPA awards until Congress provides clear reauthorization—although contractor performance generally continues on awards already made and funded before September 30, 2025.  The shutdown adds another layer of complexity:  even were Congress to act quickly, agency personnel and contracting offices are unlikely to move forward with new initiatives under either program until the government reopens. 

In short, with both SBIR/STTR and DPA authority in flux—and the government itself shuttered—contractors face a period of heightened uncertainty.  With no appropriated funding in place, agencies cannot issue new awards, even were statutory authority restored.  Large numbers of contracting, program, and legal personnel are furloughed, leaving few staff available to review proposals, process solicitations, or obligate funds.  Even essential personnel who remain on duty are limited in their ability to advance new initiatives while operating under restrictive shutdown guidance.   The combined effect is to stall award timelines and key programmatic decisions.

Companies awaiting near-term SBIR/STTR solicitations or selections, or with pending DPA-related agreements or anticipated Title III solicitations, should anticipate potentially significant delays, as new contracting actions seem unlikely without legislative action.

Tags: DoD, DPA, Legislation, NDAA, SBIR, Small Business, STTR
Print:
Email this postTweet this postLike this postShare this post on LinkedIn
Photo of Stephanie Barna Stephanie Barna

Stephanie Barna draws on over three decades of U.S. military and government service to provide advisory and advocacy support and counseling to clients facing policy and political challenges in the aerospace and defense sectors.

Prior to joining the firm, Stephanie was a senior…

Stephanie Barna draws on over three decades of U.S. military and government service to provide advisory and advocacy support and counseling to clients facing policy and political challenges in the aerospace and defense sectors.

Prior to joining the firm, Stephanie was a senior leader on Capitol Hill and in the U.S. Department of Defense (DoD). Most recently, she was General Counsel of the Senate Armed Services Committee, where she was responsible for the annual $740 billion National Defense Authorization Act (NDAA). Additionally, she managed the Senate confirmation of three- and four-star military officers and civilians nominated by the President for appointment to senior political positions in DoD and the Department of Energy’s national security nuclear enterprise, and was the Committee’s lead for investigations.

Previously, as a senior executive in the Office of the Army General Counsel, Stephanie served as a legal advisor to three Army Secretaries. In 2014, Secretary of Defense Chuck Hagel appointed her to be the Principal Deputy Assistant Secretary of Defense for Manpower and Reserve Affairs. In that role, she was a principal advisor to the Secretary of Defense on all matters relating to civilian and military personnel, reserve integration, military community and family policy, and Total Force manpower and resources. Stephanie was later appointed by Secretary of Defense Jim Mattis to perform the duties of the Under Secretary of Defense for Personnel and Readiness, responsible for programs and funding of more than $35 billion.

Stephanie was also previously the Deputy General Counsel for Operations and Personnel in the Office of the Army General Counsel. She led a team of senior lawyers in resolving the full spectrum of issues arising from Army wartime operations and the life cycle of Army military and civilian personnel. Stephanie was also a personal advisor to the Army Secretary on his institutional reorganization and business transformation initiatives and acted for the Secretary in investigating irregularities in fielding of the Multiple Launch Rocket System and classified contracts. She also played a key role in a number of high-profile personnel investigations, including the WikiLeaks breach. Prior to her appointment as Deputy, she was Associate Deputy General Counsel (Operations and Personnel) and Acting Deputy General Counsel.

Stephanie is a retired Colonel in the U.S. Army and served in the U.S. Army Judge Advocate General’s Corps as an Assistant to the General Counsel, Office of the Army General Counsel; Deputy Staff Judge Advocate, U.S. Army Special Forces Command (Airborne); Special Assistant to the Assistant Secretary of the Army (Manpower & Reserve Affairs); and General Law Attorney, Administrative Law Division.

Stephanie was selected by the National Academy of Public Administration for inclusion in its 2022 Class of Academy Fellows, in recognition of her years of public administration service and expertise.

Read more about Stephanie BarnaEmail
Show more Show less
Photo of Kayleigh Scalzo Kayleigh Scalzo

Ranked by Chambers USA among government contracts practitioners, Kayleigh Scalzo represents government contractors in bid protests and other high-stakes litigation matters with the government and other private parties. She has litigated bid protests in a wide variety of forums, including the Government Accountability…

Ranked by Chambers USA among government contracts practitioners, Kayleigh Scalzo represents government contractors in bid protests and other high-stakes litigation matters with the government and other private parties. She has litigated bid protests in a wide variety of forums, including the Government Accountability Office, U.S. Court of Federal Claims, U.S. Court of Appeals for the Federal Circuit, FAA Office of Dispute Resolution for Acquisition, federal and state agencies, and state courts.

Kayleigh a co-chair of the American Bar Association Public Contract Law Section’s Bid Protest Committee. She is also a frequent speaker on bid protest issues.

Kayleigh maintains an active pro bono practice focused on immigration issues and gender rights.

Read more about Kayleigh ScalzoEmail
Show more Show less
Photo of Michael Wagner Michael Wagner

Mike Wagner represents companies and individuals in complex compliance and enforcement matters arising in the public procurement context. Combining deep regulatory expertise and extensive investigations experience, Mike helps government contractors navigate detailed procurement rules and achieve the efficient resolution of government investigations and…

Mike Wagner represents companies and individuals in complex compliance and enforcement matters arising in the public procurement context. Combining deep regulatory expertise and extensive investigations experience, Mike helps government contractors navigate detailed procurement rules and achieve the efficient resolution of government investigations and enforcement actions.

Mike regularly represents contractors in federal and state compliance and enforcement matters relating to a range of procurement laws and regulations. He has particular experience handling investigations and litigation brought under the civil False Claims Act, and he routinely counsels government contractors on mandatory and voluntary disclosure considerations under the FAR, DFARS, and related regulatory regimes. He also represents contractors in high-stakes suspension and debarment matters at the federal and state levels, and he has served as Co-Chair of the ABA Suspension & Debarment Committee and is principal editor of the American Bar Association’s Practitioner’s Guide to Suspension & Debarment (4th ed.) (2018).

Mike also has extensive experience representing companies pursuing and negotiating grants, cooperative agreements, and Other Transaction Authority agreements (OTAs). In this regard, he has particular familiarity with the semiconductor and clean energy industries, and he has devoted substantial time in recent years to advising clients on strategic considerations for pursuing opportunities under the CHIPS Act, Inflation Reduction Act, and Bipartisan Infrastructure Law.

In his counseling practice, Mike regularly advises government contractors and suppliers on best practices for managing the rapidly-evolving array of cybersecurity and supply chain security rules and requirements. In particular, he helps companies assess and navigate domestic preference and country-of-origin requirements under the Buy American Act (BAA), Trade Agreements Act (TAA), Berry Amendment, and DOD Specialty Metals regulation. He also assists clients in managing product and information security considerations related to overseas manufacture and development of Information and Communication Technologies & Services (ICTS).

Mike serves on Covington’s Hiring Committee and is Co-Chair of the firm’s Summer Associate Program. He is a frequent writer and speaker on issues relating to procurement fraud and contractor responsibility, and he has served as an adjunct professor at the George Washington University Law School.

Read more about Michael WagnerEmail
Show more Show less
Photo of Victoria Skiera Victoria Skiera

Victoria Skiera is an associate in the firm’s Government Contracts Practice Group, advising clients on a range of regulatory and compliance issues. Victoria is actively engaged in assessing the impact of executive order and litigation activity in the context of federal procurement and…

Victoria Skiera is an associate in the firm’s Government Contracts Practice Group, advising clients on a range of regulatory and compliance issues. Victoria is actively engaged in assessing the impact of executive order and litigation activity in the context of federal procurement and financial assistance. She also has experience assisting clients with unique issues arising in government contracts transactions, and in internal and external investigatory matters. Victoria maintains an active pro bono practice.

Read more about Victoria SkieraEmail
Show more Show less