SBIR and STTR Programs

Small Business Innovation Research (SBIR) is a highly competitive program that encourages small businesses to explore their technology potential and provides an incentive to profit from its commercialization.

Small Business Technology Transfer Research (STTR) stimulates and fosters scientific and technological innovation through cooperative research and development carried out between small businesses and research institutions. These university-based researchers, by joining forces with small companies, can spin-off their commercially promising ideas while remaining primarily employed at their research institutions.

If further development of a product based on your invention is necessary, and applications are appropriate, development funding via SBIR/STTR grants should be pursued.

The SBIR and STTR Programs are federal initiatives that provide over 2.5 billion in grants and contracts each year to small businesses and start-up companies to develop new products and services based on advanced technologies.

 

Eleven federal Agencies are required to reserve a portion of their R&D budget for the SBIR program and five of them are additionally providing funding for STTR program.

Agencies Participating in SBIR/STTR Program:

  • Department of Defense (DOD) SBIR and STTR
  • Health and Human Services (HHS) SBIR and STTR
  • National Aeronautics and Space Administration (NASA) SBIR and STTR
  • Department of Energy (DOE) SBIR and STTR
  • National Science Foundation (NSF) SBIR and STTR
  • Department of Homeland Security (DHS) SBIR
  • Department of Agriculture (USDA) SBIR
  • Department of Commerce (DOC) SBIR
  • Department of Education (ED) SBIR
  • Environmental Protection Agency (EPA) SBIR
  • Department of Transportation (DOT) SBIR

Although the SBIR/STTR program is a federal initiative, each agency is different, has  different culture, different interpretation of the SBA guidelines, different requirements for Principal Investigators, different submission, composition and formatting requirements, page limitations, different evaluation process, etc. 
Generally, federal agencies want to work with the applicant even before a solicitation announcement. Get to know the agency program manager, who is the gateway to the program and help you understand what the agency is looking for. Thus, it is highly recommended that you carefully read each solicitation and contact the agency prior to starting proposal preparation process.

Typical SBIR Phases of Funding
Phase I – Feasibility Study
Phase II –Full research R&D - Commercial Prototype
Phase III – Commercialization Stage
Phase Gap Funding
Fast Track (both Phase I and Phase II application are submitted together).
Extensions and continuation programs.

 

Major Rules Governing SBIR/STTR Programs

A. Small Business Qualification for SBIR/STTR Programs:
A small business concern for purposes of award of any funding under the SBIR/STTR program must, on the date of award:

  • be organized for profit, with a place of business located in the United States, and operate primarily within the United States or make a significant contribution to the United States economy through payment of taxes or use of American products, materials or labor;
  • be in the legal form of an individual proprietorship, partnership, limited liability company, corporation, joint venture, association, trust or cooperative, except that in the case of a joint venture there can be no more than 49 percent participation by foreign business entities;
  • be at least 51 percent owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the United States; or,
  • only for SBIR, be at least 51% owned and controlled by another for-profit business concern that is at least 51% owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the United States.
  • have, including its affiliates, no more than 500 employees.

It is always a Small Business, which applies for the grant or contract and receives an award.

B. Major difference between SBIR and STTR Programs
STTR program requires cooperative research and development between Small Business and Research Institution. There must be in place a formal cooperative R&D agreement between Small Business and Research Institution, including agreement on allocation of rights in IP and rights to carry out follow-on R&D and commercialization, before any STTR work can be started.

C. Definition of Research Institution
Research institution must

  • be located in the US
  • meet one of the following conditions:
  • be a domestic non-profit research organization
  • be a non-profit college or university
  • be a Federally Funded Research and Development Center (FFRDC).

D. PI Eligibility
For SBIR - PI must be employed with the small business at the time of award and for the duration of the project period.
For STTR – PI may be from either small business or research institution except for the NSF grants where the PI must be employed by the small business.

E. Work allocation requirements for SBIR/STTR proposal
Percentage of work is based on total budget allocation for Small Business and the Research Institution

For SBIR: 

    • Phase I – Min. of 66% of work must be done by the Small Business
    • Phase II – Min. of 50% of work must be done by the Small Business

 

For STTR:

    • Phase I and Phase II -
        • Min. of 40% of work  must be done by the Small Business, and
        • Min. of 30% of work  must be done by the Research Institution
    • Phase II – Min. of 50% must be done by the Small Business.

 

Important Facts to Remember

    • Eligibility is determined at the time of award.
    • The PI is not required to have an advanced degree (Ph.D. or M.D.)
    • The PI is required to have expertise to oversee project scientifically and technically.
    • Always check an announcement for updated eligibility requirements.

Advice From The Agencies;

    • Don’t depend solely on SBIR funding
    • Don’t do it alone - use support systems
    • Define desired , or expected outcome at the outset of the project
    • Win or lose - obtain and review evaluations
    • Be PERSISTENT

You Can Write A Winning SBIR/STTR Proposal!
And TCO Can Help You….

For more information please contact

Business and Grants Manager
Danuta Petelenz, MS, MBA – (801) 213-3585