Small Business Engineering Resource: Breaking the SBIR-Mill Business Model and Creating Big Companies From Small Ones

Abstract

The Small Business Innovation Research (SBIR) program funds important applied research that often fails to transition into fielded military capability. Recent congressional activity highlights continued frustration with this gap (Ernst, 2026). This paper argues that pending SBIR reauthorization (as of this writing) does not address the root cause: Topics, statutory funding caps, and governance remain misaligned with acquisition pathways and current acquisition transformation efforts (Bresler, 2023; Department of Defense, 2025). We redefine the pervasive “SBIR-mill” outcome not as a moral failing of firms, but as a predictable result of government-created incentives that prioritize recurring research over production at scale, inhibit acquisition success, and prevent graduation from the program (Bryant, 2025). To rectify this, we propose recasting SBIR as the Small Business Engineering Resource (SBER): a program oriented toward engineering execution, qualification, and integration so solutions are mature enough for adoption and scaling. This is not a cosmetic rebrand; it is a shift from early-stage R&D toward deliverables that are programmatically and financially embedded in Programs of Record, so transition is planned and funded from the start. We outline a research design to evaluate two measurable transition outcomes: (a) integration into a Program of Record under a prime contractor or (b) displacement of an incumbent supplier enabled by open interfaces and competed technology insertion. We derive testable hypotheses and a data plan using federal acquisition data, with policy levers including fewer, larger awards (e.g., >$20 million), topics tied to Program of Record requirements with accountable PM sponsorship, and budgeting aligned to PPBE with explicit funds for integration, test, qualification, delivery, and iterative improvement.