National Security Concerns Can Bar SBIR Awards- Key Takeaways from Kayhan Space Corp. v. United States

Short summary

U.S. Court of Federal Claims upheld Air Force's denial of a SBIR award to a Colorado space startup whose co-founders had historical ties to Iranian institutions, rejecting claims of improper debarment. The decision affirms broad national security screening authority under the 2022 SBIR Extension Act, which mandates review of applicants with connections to Iran, China, Russia, and North Korea. For founders with foreign ties, even decades-old educational or employment connections can trigger high-risk ratings and contract denial.

• •Court upheld SBIR award denial based on founders' historical ties to sanctioned Iranian entities
• •Air Force has broad deference in national security determinations; courts rarely overturn them
• •Congress expanded screening under 2022 SBIR Extension Act for four countries of concern

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