The SBIR program is the largest Federal source of non-dilutive seed-stage funding available. The program is highly competitive, but this funding is available exclusively to small (e.g., < 500 employees) businesses.
The intent of the program is to drive technology development and new business creation and spur innovation in areas to meet identified national needs (in this case a need by the Navy).
The average is for them to fund 2-5 Phase 1 awards at $150K and then 1-2 Phase II awards of $1MM each based on the most promising of the Phase I. Given recent changes to the SBIR program, note that Phase I SBIRs can now be for $150K and Phase IIs at $1MM.
It can happen, but is rare, that they would fund nothing on a topic in the solicitation.
And as you say, compelling results out of the SBIR work can lead to follow-on work that is >> $1MM.
The short of it is, the Navy is interested in this topic, and if you have a small tech business with innovative ideas in this space there is a great funding opportunity here for you to advance your tech and grow your business.
The intent of the program is to drive technology development and new business creation and spur innovation in areas to meet identified national needs (in this case a need by the Navy).