2012 SADBOC Government Procurement Fair April 25, 2012 SBIR/STTR Basics Becky Aistrup SBIR/STTR Program Director Minnesota Science & Technology Authority www.PositivelyMinnesota.com/SciTech www.mnscienceandtechnologyauthority.org firstname.lastname@example.org (651) 259-7634
Important InfoThe SBIR/STTR programs were reauthorized by Congress & signed by thePresident Dec. 2011. The SBA is in the process of recommending how thesechanges will be implemented by the agencies, so exact mechanisms &implementation dates are pending. This presentation is the CURRENTprogram, but will be changing during 2012 in these key ways:• increasing the SBIR allocation from 2.5 percent to 3.2 percent over several years,• increasing the STTR allocation from .3 percent to .45 percent over five years,• allowing VC, hedge fund and private equity funded companies to participate to 25 percent for NIH, DOE, and NSF, and 15 percent for other agencies,• raising the award levels, allowing for annual inflation adjustments, limiting jumbo awards,• increasing small business collaborations with federal laboratories,• shortening the time for final decisions and the amount of time between decision and release of funds• increasing oversight to reduce fraud and abuse, and• allowing the agencies to use 3 percent of SBIR funds to administer the SBIR program, increase oversight, and provide outreach and application assistance to address shortcomings in the low participation of women, minorities and states with few awards.PLEASE CHECK RULES IN EFFECT AT THE TIME OF PROPOSAL SUBMISSION!!CALL OUR OFFICES IF YOU HAVE QUESTIONS (Becky Aistrup 651-259-7634)
SBIR/STTR Program Descriptions• SBIR (Small Business Innovation Research): • 2.6% set-aside of extramural research budget for small businesses to participate in federal R&D • 11 federal agencies with R&D >$100 million• STTR (Small Business Technology Transfer): • 0.35% set-aside program to facilitate cooperative R&D between small businesses and non-profit research institutions • 5 federal agencies with R&D >$1 billion• Both focus on commercializable technology, not “basic” research
Who qualifies for funding?**• Small Business (<500 employees) located in U.S.• Established for-profit• R&D must be performed in the U.S.• Company-controlled research facilities – Access to special facilities is allowed• At least 51% U.S. owned & independently operated – Firms more than 50% owned by large companies, VCs, other institutions ARE NOT eligible – …unless the majority (single) entity meets the definition of a small business (<500 employees, ownership)**Rules changing: read current instructions carefully!
Why SBIR/STTR as a funding source?• A source of high risk seed funding• Will provide funding when you’re pre-revenue• “Goes where other funding sources fear to tread!”—even family!
Why Small Companies Should Participate• No pay-back requirement!• No equity lost!• Visibility and credibility• Seed money for high risk R&D projects that may attract strategic partners or future investment• Small and isolated companies compete on equal footing• Opportunity to establish a sole-source position with federal government• No penalty for failure, other than time invested Plus…
Liberal Patent & Data Rights• Only in SBIR/STTR• Recipient can apply for worldwide patents• Federal government gets royalty free license if: – Nat’l emergency, failure to commercialize in 4 yrs, fail to mfg. in U.S.• Can still participate if you have a patent on the basic technology• PLUS data rights extend to 4 years after completing the contract/grant (5 yrs. for DoD)
Three Phase Program SBIR STTRPhase I 6 months 12 months(Proof of Concept) Up to $150K Up to $100KPhase II 2 years 2 years(R&D→Prototype) Up to $1MM Up to $750KPhase III Requires the use of non-SBIR and STTR funds(Commercialization) *Funding limits vary in some agencies
Comparing SBIR & STTR Programs SBIR STTRFirm eligibility U.S., for-profit, <500 employees including affiliatesCollaboration May subcontract Must collaborate withw/research university/nonprofitinstitution research institutionPI (Principal Must be >50% time May be employed by firm orInvestigator) employed by firm research institutionWork breakdown Firm 2/3 or more of Firm must perform 40% or work in Phase I more of work and research Firm 1/2 or more of institution >30% of work work in Phase II (Phase I and Phase II) *Applies at the time of award and for the duration of the project
Principal Investigator (PI) The PI is the single point of contact for the research project and is responsible to ensure that work is accomplished according to contract agreement. Eligibility: SBIR STTRPI MUST be primarily employed PI may be primarily employed by(>50% of time) by small firm small firm or research institutionPI must spend “considerable” time on the SBIR/STTR projectPI must be well-credentialed and on leading edge of disciplinePI is NOT required to have a PhD or MD, but must have expertise tooversee the complete project scientifically and technicallyPI eligibility determined at the time of the award & for project duration
Participating Agencies & Funding Mechanisms Agency * SBIR funding STTR fundingDoD $1.23 Billion $141 MillionHHS (NIH, CDC, FDA) $600 Million $72 MillionEnergy (DOE) $138 Million $17 MillionNASA $113.4 Million $13.6 MillionNSF $97 Million $13 MillionHomeland Security (DHS) $20.5 Million NAAgriculture (USDA) $19 Million NAEducation $9.9 Million NATransportation $8 Million NACommerce (NIST, NOAA) $8 Million NAEPA $5 Million NA * Grants Contracts Both Grants & Contracts $2.5 Billion in FY09
Typical* SBIR/STTR Calendar Agency Solicitation Release Date → Submission DeadlineDoD SBIR: Nov → Jan, Apr → Jun, Jul → Sep STTR: Jan → Mar, Jul → SepHHS (NIH, CDC, FDA) Contracts: Aug → Nov Non-AIDS Grants: Jan → Apr & Aug & Dec AIDS Grants: Jan → May & Sep & JanEnergy (DOE) Sep → NovNASA Jul → SepNSF Mar →Jun, Aug → DecDHS S&T Directorate: May → June, Nov → Jan DNDO: Mar → MayAgriculture (USDA) Jun → SepEducation (DOEd) IES: Dec → June NIDRR: Jan → MarDOT Dates vary: Spring (Apr → June), Fall (Oct → Dec)Commerce (NIST, NOAA) NIST & NOAA: Oct → JanEPA Mar → May * Subject to change—Check Agency websites or www.zyn.com/sbir
Grants vs. Contracts• SBIR/STTR programs that award GRANTS: – Rarely the Final Customer – Will not buy your product/process/software or your intellectual property – They do want to see you commercialize your research, so Phase III is still important – Fund proposer-initiated topics, but must be within the mission of the agency – Tend to be more focused on qualifications of the PI• Programs that award CONTRACTS: – Will specify agency needs and request solutions – Will often be a Final Customer—you could become a sole source supplier! – Fund only agency-initiated topics
Agency Differences: Exceptions are the Rule!• Many differences among agencies: – Funding levels – Topic areas – Number and timing of solicitations – Proposal preparation instructions – Submission process – Type of award Read – Review process solicitations – Odds of receiving funding carefully!! – Commercialization assistance – Gap & FastTrack funding – # of proposals a firm can submit
Duplicate submissions?• Applications may be submitted to different agencies for similar work – Multiple submissions and previous awards must be revealed• Awards may not be accepted from different agencies for duplicative projects
Phase I Process & Timing • Agencies describe R&D topics Solicitation in solicitations. Topics ~6-9 months gap • Firms prepare proposals. Proposal Unsolicited proposals are not Submission accepted (some exceptions). • Agencies evaluate on technical Evaluation merit, firm’s qualifications, commercial potential & societal impact.Phase I Award • Agencies make Phase I awards.
Phase II Process & Timing• Only Phase I winners may apply• Some agencies (DoD, DHS, DOT, EPA, NIH Contracts) allow Phase II submission only by invitation.• Submission timing/deadlines vary –talk to your funding agency• 4 to 18 month gap between Phase II submission & award – Some agencies have options, early decision programs, FastTrack programs ~5 years from Phase I to Phase III Commercialization
Ask before deciding to participate• Does winning enhance your corporate goals?• Do you possess the required technical competence/Do you have access to an appropriate PI?• Can you gain access to necessary resources?• What agency need/opportunity will you address?• Do the program’s timing and gaps work within your company’s plans?
Unacceptable SBIR Objectives*• Proposed efforts directed toward systems studies• Market research• Commercial development of existing products or proven concepts• Straightforward engineering design for packaging• Laboratory evaluations• Incremental product or process improvements• Evolutionary optimization of existing products• Modifications to broaden the scope of an existing product or application*From NSF’s FY 2010 SBIR Phase I Solicitation
Proposal Evaluation Criteria• Fit with agency mission• Technical quality & innovation• Credibility of the PI & research team• Commercial potential• Appropriate budget• Suitability/availability of resources
Your Odds of Winning• Phase I SBIR Proposal: About 1 in 8/9• Phase I STTR Proposal: About 1 in 5• Phase II Proposal: About 40%-70% – varies by agency• ½ of Phase I proposals go to companies who never won before.
Improve your odds!• About 1:3 properly prepared proposals win vs. 1:9 overall.• Up to 40% of proposals submitted are noncompliant!
Improve your odds! Problem Solution• Noncompliance with • Read solicitation carefully & solicitation prepare a checklist• Unaware of public research in • Have leading edge PI; do the field literature & online research• Lack of systematic approach to the problem • Know how to design an experiment & project plan• Lack of necessary “state of the art” expertise • Use subcontracting &• Proposal not specifically consultants to augment focused on agency problem • Know your Customer!!
Typical Award Winner Profile• Proposed solution meets agency need• Submitted 2+ proposals before winning• Understands current state-of-the-art and can relate it to their innovation• Adequately communicates path to market• Adequate qualifications & experience for research & commercialization• Adequate support staff and equipment• Provides a defensible budget• Don’t get discouraged!
Finding Agency Solicitations• Central link to all agencies: www.zyn.com/sbir
Find a Topichttp://www.grants.gov/applicants/find_grant_opportunities.jsp Multiple browsing & searching options Register for Opportunity Notifications
Find a Topichttp://www.pnl.gov/edo/opportunities/sbir.stm Cross-agency alerting service
Getting Started: Register for Electronic Submission1. Obtain a DUNS number FIRST Dun & Bradstreet: 1-866-705-5711 or http://fedgov.dnb.com/webform/displayHomePage.do2. Register in Central Contractor Registry for a CAGE code: CCR site: http://www.ccr.gov Keep a copy of all usernames/passwords!
Register for Electronic SubmissionFor NIH, USDA and DOE, MUST register your organization on www.grants.gov Guide & Checklist Tutorial
DoD Registration & Submission www.dodsbir.net Register here
DHS Registration & Submission www.sbir.dhs.gov Register here
NASA Registration & Submission www.sbir.nasa.gov Register here
NSF Registration & SubmissionNSF’s FastLane site: ww.fastlane.nsf.gov Register here
DOEd Registration & Submission e-Grants portal: http://e-grants.ed.gov Register here
Submitting to other agencies• DOC (NIST & NOAA) – Requires hard copy submission (see solicitation for specifics)• DOT – Requires electronic submission but no prior registration; web address is given in solicitation• EPA – Requires hard copy submission (see solicitation for specifics)