Authority to make additional sequential Phase II awards under the Small Business Innovation Research program or Small Business Technology Transfer program

(a) In general Notwithstanding paragraph (1) of section 9(ff) of the Small Business Act (15 U.S.C. 638(ff)(1)), during each of fiscal years 2026 through 2029, the Secretary of Defense may award one additional sequential Phase II SBIR award or one additional sequential Phase II STTR award during each such fiscal year to a small business concern that received an additional Phase II award under such paragraph (1) for continued work on the project for which the small business concern received such award. (b) Limitations In carrying out this section, the Secretary of Defense— (1) may use not more than 3 percent of the funds allocated to the SBIR program or STTR program of the Department, as applicable; (2) shall minimize, to the maximum extent possible, the number of awards made using the authority under this section; and (3) shall notify the Administrator of the Small Business Administration of the use of the authority under this section before making an award under this section that includes an explanation of why the Secretary elected to use the authority under this paragraph instead of seeking a Phase III award for such project. (c) Definitions In this section, the terms SBIR, STTR, and Phase II have the meanings given, respectively, in section 9 of the Small Business Act (15 U.S.C. 638).