Supporting mom-and-pop tech shops

Since the program’s inception, over $13 billion in funding has been awarded, participating agencies have received more than 390,000 Phase I and Phase II proposals in response to 270 solicitations, and awards have been made in all 50 states, Puerto Rico and the District of Columbia. Yet, due in part to the breadth of administrative agencies involved in SBIR, the program may appear to be more complex and formidable than it actually is. Understanding the various players involved and utilizing the resources available through the Small Business Administration (SBA) are crucial for success.
In general, the eligibility requirements for all the SBIR programs are fairly static. Products and services developed through SBIR fundingshould be intended for commercialization. Applicant companies must also be American-owned and independently operated. According to the SBA’s Handbook for SBIR Proposal Preparation, “nearly all solicitation topics can be divided into one of the following three categories: produce a product with performance characteristics described in the topic statement; solve or contribute to the solution of a particular problem important to the agency’s mission; perform research in a technical area, the advancement of which would have implications for the agency’s future needs.”
SBIR programs are administered in part through the SBA’s Office of Technology. Currently, 11 US departments and agencies are required to reserve a portion of their R&D budgets for the SBIR program. The participating agencies develop their individual program foci, create and disseminate the requests for proposals, accept and evaluate proposals and monitor the post-award requirements. The SBA gathers data from each participating federal agency, monitors the overall progress of the program and reports to Congress annually.
Proposal review criteria generally include degree of innovation, technical merit, and future market potential. Successful applicants are expected to complete a three-phase program. Each phase has specific objectives and award levels.
Phase I provides grants of up to $100,000 for approximately six months to investigate the technical merit or feasibility of the proposed product or service. Phase I grantees are the only applicants eligible to apply for Phase II funding. They must reapply in order to continue into Phase II.
Phase II is the primary R&D phase, in which the grant recipient is expected to evaluate the commercial potential of its product. Naturally, favorable Phase I results are critical to receiving a Phase II award, as is a strong Phase II proposal. Phase II awards may be for as much as $750,000 over two years to expand Phase I results.
The SBIR program provides no funding for Phase III. It is anticipated that successful Phase I and II grantees will find additional funding in order to achieve the Phase III objective of commercializing the products or services developed earlier in the award process.
Finding the right SBIR program
As with many grant programs, the most ideal fit between applicants and grant programs occurs when companies apply to programs that seek to support their current business needs, rather than businesses responding to an opportunity simply because it’s available. Timing is crucial, and the strongest proposals accurately reflect and specifically describe the company’s business plan and capabilities for
R&D and marketing efforts. Reviewers must be convinced that companies have the resources and desire—reflected through their business plan—to pursue the proposed initiative.
That said, since the foci of the SBIR programs vary widely from administrative agency to administrative agency, finding the right department or agency can be a challenge. Certainly, common sense can help determine whether or not one wants to scan opportunities listed through the Department of Defense (DoD) or the Department of Health and Human Services (DHHS), which includes SBIR programs offered through the National Institutes of Health (NIH).
However, if a company seeks to develop materials that can detect or protect against bioterrorist attacks, it’s possible that both departments may have programs for which they would be eligible. In these cases, the SBA advises potential applicants to consider whether the administrative department or agency is solution-oriented or research-oriented. DoD is characterized as solution-oriented, andthus favors highly innovative projects and proposals. NIH, in turn, favors projects with significant potential to add new knowledge to the field.
Finding the right fit may also be complicated by the fact that different administrative agencies and departments hold their competitions at different timesof year. To make it easier to track current and upcoming opportunities, the SBA provides links to each participating agency and department at sbir/indexprograms-otaagency.html. New and upcoming solicitations are available at PSA04SBIRandSTTR.doc.
The Small Business Technology Transfer Program
Companies interested in the SBIR program may also want to investigate opportunities offered by the Small Business Technology Transfer Program (STTR), which favors private/ public partnerships for R&D efforts.
STTR seeks to channel the research capabilities in America’s non-profit research laboratories and institutions of higher education to the marketplace by linking theoretical research to product and service development. STTR small-business applicants must meet the same criteria as those applying to the SBIR program. Their non-profit partners must be located within the United States and be an institution of higher education, a non-profit research organization or a Federally Funded R&D Center (FFRDC).
The STTR program is available through DoD, the Department of Energy, DHHS, the National Aeronautics and Space Administration and the National Science Foundation. Similar to the SBIR program, the STTR program has three phases, the last of which requires the applicant to find another funding source to see the project through completion and into the marketplace. Information on the STTR program can be found at SBA’s website at indexsbir-sttr.html.
No changes are anticipated in the SBIR and the STTR programs for fiscal 2005. HST
SBIR grantors
Some of the major grant-making federal departments and agencies include:

  • Agriculture
  • Commerce
  • Defense
  • Education
  • Energy
  • Health and Human Services
  • Homeland Security
  • Transportation


  • Environmental Protection Agency
  • National Aeronautics and Space Administration
  • National Science Foundation

(The Nuclear Regulatory Commission has opted out of the program due to budget cuts.)

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