Reauthorization of the Small Business Innovation Research (SBIR)

Although the future of funding for innovative research seems bleak, there is a source of support for small businesses and startups: Small Business Innovation Research (SBIR) grants. On December 31, 2011, the President signed into law the National Defense Reauthorization Act of 2012, extending the SBIR program through September 2017.

The DoD SBIR program funds over one billion dollars each year in early-stage R&D projects at small technology companiesemploying fewer than 500 workers. SBIR is administered by the Small Business Administration through 11 agencies. DoD accounts for more than half of the federal government’s total SBIR program.

Why would small businesses want to participate?

Because there are no strings attached. An SBIR awardee retains data rights for four years or more (5 for DoD). The SBIR program is the largest source of early-stage R&D funds for small business. Follow-on grants are awarded non-competitively. Strong transition support is focused on commercialization.

SBIR Program Eligibility

To receive an SBIR award, potential awardees must qualify as a “Small Business Concern” (SBC), and satisfy the following conditions:

(1) be organized for profit, with a place of business located in theU.S., which operates primarily within the U.S., or make a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor; and

(2) be in the legal form of an individual proprietorship, partnership, limited liability company, corporation, joint venture, association, trust or cooperative, except that if the concern is a joint venture, each entity to the venture must be at least 51 percent owned and controlled by another business concern that is itself at least 51 percent owned and controlled by U.S. citizens or permanent resident aliens in the United States.

Under SBIR, a federally mandated 2.5 percent assessment of extramural research dollars is provided to small research firms with 500 employees or less. Eligible projects must fulfill an R&D need identified by the DoD and have the potential to be developed into a product or service for commercial or defense markets.

Grant Awards

Phase I — The objective of Phase I is to establish the technical merit, feasibility, and commercial potential of the proposed R&D efforts and to determine the quality of performance of the small business awardee organization prior to providing further federal support in Phase II. SBIR Phase I awards normally do not exceed $150,000 total costs for 6 months.

Phase II — The objective of Phase II is to continue the R&D efforts initiated in Phase I. Funding is based on the results achieved and the scientific and technical merit and commercial potential of the project proposed in Phase II. Only Phase I awardees are eligible for a Phase II award. SBIR phase II awards normally do not exceed $1 million total costs for 2 years.

Phase III – The objective of Phase III, where appropriate, is for the small business to pursue commercial-ization objectives resulting from the Phase I/II R&D activities. The SBIR program does not fund Phase III. For some federal agencies, Phase III may involve follow-on non-SBIR funded R&D or production contracts for products, processes or services intended for use by the U.S. Government.

The Department of Defense issues three SBIR solicitations for proposals annually. Each solicitation has a pre-release, open and close. During the pre-release period the government is not accepting proposals, but small businesses can discuss technical questions directly with the topic authors (contact information available in each topic). Once the solicitation is open, direct questions with the topic authors are no longer allowed, but technical questions may be submitted anonymously through the SBIR Interactive Topic Information System (SITIS).

FY 2013 Schedule

DoD Small Business
Transfer (STTR) 2013.A
25 Jan 201325 Feb 201327 Mar 2013
DoD SBIR 2013.224 Apr 201324 May 201326 Jun 2013
DoD SBIR 2013.326 Jul 201326 Aug 201325 Sep 2013
DoD STTR 2013.B26 Jul 201326 Aug 2013Sep 2013

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