Step 1: SBIR proposal process – background

The Small Business Innovation Research (SBIR) Program and its sibling, the Small Business Technology Transfer (STTR) program, are federal initiatives that provide over $2 billion in grants and contracts each year to small and start-up companies to develop new or enhanced products and services based on advanced technologies.

About 40% of the SBIR Phase I awards made each year go to firms with no prior SBIR experience. SBIRs are administered by 10 federal agencies for the purpose of helping to provide early-stage Research and Development funding to small technology companies (or individual entrepreneurs who form a company).

Solicitations are released periodically from each of the agencies and present technical topics of R&D which the agency is interested in funding. Companies are invited to compete for funding by submitting proposals answering the technical topic needs of the agency’s solicitation. Each of these 10 agencies have various needs and flavors of the SBIR program and you can learn more about them by visiting their sites.

Eligibility and Application (Proposal) Requirements

  1. To receive SBIR funds, each awardee of a SBIR Phase I or Phase II award must qualify as an SBC (less than 500 employees).
  2. For Phase I, a minimum of two-thirds of the research or analytical effort must be performed by the awardee. Occasionally, deviations from this requirement may occur, and must be approved in writing by the funding agreement officer after consultation with the agency SBIR Program Manager/Coordinator.
  3. For Phase II, a minimum of one-half of the research or analytical effort must be performed by the awardee. Occasionally, deviations from this requirement may occur, and must be approved in writing by the funding agreement officer after consultation with the agency SBIR Program Manager/Coordinator.
  4. For both Phase I and Phase II, the primary employment of the Principal Investigator (PI) must be with the SBC at the time of award and during the conduct of the proposed project.
  5. For both Phase I and Phase II, the R/R&D work must be performed in the United States.

Proposal Requirements

An SBC submitting a proposal for a funding agreement for Phase I of an SBIR Program that has received more than 15 Phase II SBIR awards during the preceding 5 fiscal years must document the extent to which it was able to secure Phase III funding to develop concepts resulting from previous Phase II SBIR awards. Note: SBIR proposal mills are discouraged!

Commercialization Plan. A commercialization plan must be included with each proposal for an SBIR Phase II award moving toward commercialization. Elements of a commercialization plan may include the following:

  • Company information: Focused objectives/core competencies; size; specialization area(s); products with significant sales; and history of previous Federal and non-Federal funding, regulatory experience, and subsequent commercialization.
  • Customer and Competition: Clear description of key technology objectives, current competition, and advantages compared to competing products or services; description of hurdles to acceptance of the innovation.
  • Market: Milestones, target dates, analyses of market size, and estimated market share after first year sales and after 5 years; explanation of plan to obtain market share.
  • Intellectual Property: Patent status, technology lead, trade secrets or other demonstration of a plan to achieve sufficient protection to realize the commercialization stage and attain at least a temporal competitive advantage.
  • Financing: Plans for securing necessary funding in Phase III.
  • Assistance and mentoring: Plans for securing needed technical or business assistance through mentoring, partnering, or through arrangements with state assistance programs, SBDCs, Federally-funded research laboratories, Manufacturing Extension Partnership centers, or other assistance providers.
  • Data Collection: Each Phase II applicant will be required to provide information to the Tech-Net Database System (htto://

Federal and State Technology (FAST) Partnership Program and Outreach Program

Public Law 106-554, established the Federal and State Technology Partnership Program (FAST Program) to strengthen the technological competitiveness of SBCs in the United States. Congress found that programs that foster economic development among small high-technology firms vary widely among the States.

The purpose of the FAST Program is to improve the participation of small technology firms in the innovation and commercialization of new technology, thereby ensuring that the United States remains on the cutting-edge of research and development in the highly competitive arena of science and technology. SBA administers the FAST Program.

Responsibilities of Small Business Administration (SBA)

SBA’s Office of Technology will annually obtain available information on the current critical technologies from the National Critical Technologies panel and the Secretary of Defense and provide such information to the SBIR agencies. SBA will request this information in June of each year. The data received will be submitted to each of the participating Federal agencies and will also be published in the September issue of the SBIR Pre-Solicitation Announcement.

Examples of SBIR Areas to be Monitored by SBA

  1. SBIR Funding Allocations. The Act defines the SBIR effort (R/R&D), the source of the funds for financing the SBIR Program (extramural budget), and the percentage of such funds to be reserved for the SBIR Program (3.0 percent). The Act requires that SBA monitor these annual allocations.
  2. The accomplishment of scheduled SBIR events, such as SBIR Program solicitation releases and the issuance of funding agreements. SBA monitors these and other operational features of the SBIR Program. SBA does not plan to monitor administration of the awards except in instances where SBA assistance is requested and is related to a specific SBIR project or funding agreement.
  3. SBA monitors whether follow- on non-Federal funding commitments obtained by Phase II awardees for Phase III were considered in the evaluation of Phase II proposals as required by the Act.
  4. SBA monitors whether or not agencies consider Phase III awards for their contracting requirements. The SBA has the ability to challenge the agency’s decision.
  5. SBA’s monitoring activity also includes review of policies, rules, regulations, interpretations, and procedures generated to facilitate intra- and interagency SBIR Program implementation.

– Eric Adolphe


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