SMALL BUSINESS INNOVATION RESEARCH

WHAT IS SMALL BUSINESS INNOVATION RESEARCH (SBIR)?

The Federal SBIR program funds approximately $2.3 Billion annually for early stage research and development efforts of a high-risk nature that may have excellent commercial potential. The SBIR program, established in 1982, provides an exceptional opportunity for any innovator who is capable of conducting high quality research and development. The purpose of the SBIR program is to

1. stimulate technological innovation,
2. use small business to meet federal R &D needs,
3. encourage the participation by socially and economically disadvantaged persons in technological innovation and
4. increase private sector commercialization derived from federal R&D

WHAT FEDERAL AGENICIES PARTICIPATE IN THE SBIR PROGRAM?

• Department of Agriculture
• Department of Commerce
• Department of Defense
• Department of Education
• Department of Energy
• Department of Health & Human Services
• Department of Homeland Security
• Department of Transportation
• Environmental Protection Agency (EPA)
• National Aeronautics and Space Administration (NASA)
• National Science Foundation

WHO IS ELIGIBLE TO PARTICIPATE IN THE SBIR PROGRAM?

The business eligibility requirements for the SBIR program include the following:

• American owned (at least 51%) and independently operated
• For-profit entity
• Principal researcher employed (at least 51%) by small business
• Able to perform two-thirds of the Phase I and one-half of the Phase II work
• An SBA-defined small business (less than 500 employees)

The specific definitions regarding principal investigator requirements vary among the agencies so check to determine the guidelines for the agency you are applying.

SBIR IS A THREE PHASE PROGRAM

Phase I: is based on proposals solicited by participating agencies. These solicitations contain topics on which small firms are invited to submit proposals. The proposal describes the results the firm intents on attaining, the approach the firm will take and how it will prove the feasibility of its approach. Phase I awards are up to $100,000 for approximately a six month period. Phase I projects should show: (1) the proposing firm can do high quality R&D, (2) the proposed effort is technically feasible, (3) sufficient progress has been made to justify a much larger agency investment in Phase II.

Phase II: is based upon the results of Phase I, and the scientific and technical merit of the Phase II proposal. Phase II awards are up to $750,000 and the principal R&D effort with the duration not to exceed two years.

Phase III: the company actually pursues commercial application of the R&D conducted during Phase I and Phase II. There is no federal funding of Phase III. The funding for Phase III is typically provided by private sector sources, such as bank financing, venture capital and/or equity funding.

SBIR PROPOSAL SPECIFICS

SBIR proposal can not exceed 25 pages and must follow the specific guidelines established by each agency. The following is a general list of proposal elements regardless of agency:

1. Cover sheet
2. Abstract or project summary
3. Description of the problem or opportunity
4. Background and technical approach
5. Technical objectives
6. Work plan
7. Related research
8. Commercial applications
9. Key personnel
10. Budget

Review the specific agency guidelines and format prior to preparing your proposal to insure that you comply with the requirements. If your proposal does not follow the agency's requirements it will be administratively rejected with out review. Also check on the deadline receipt requirements. Some agencies require delivery and other require a
post-mark prior to the deadline for submission.

SBIR PROPOSAL EVALUATION PROCESS

Each agency uses different review processes. Some agencies use internal reviewers or employees of the agency.

Other agencies use external reviewers such as university faculty members. All agencies use the same general review criteria. The review criteria includes the following:

1. Scientific and Technical Merit
2. Importance of the Problem
3. Scientific or Technical Innovation
4. Potential Commercial Application of Innovation
5. Investigator and Resource Qualifications
6. Budget

The time required for the review process varies among agencies but generally takes approximately five to six months. Each agency also uses different scoring or ranking systems.