Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) Programs: “America’s Seed Fund”

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The Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are highly competitive programs that encourage domestic small businesses to engage in Federal Research/Research and Development (R/R&D) with the potential for commercialization. Through a competitive awards-based program, SBIR and STTR enable small businesses to explore their technological potential and provide the incentive to profit from its commercialization. By including qualified small businesses in the nation’s R&D arena, high-tech innovation is stimulated, and the United States gains entrepreneurial spirit as it meets its specific research and development needs.

The mission of the SBIR/STTR programs is to support scientific excellence and technological innovation through the investment of Federal research funds in critical American priorities to build a strong national economy.  To that end, agencies with more than $100 million per year in their extramural research budge are compelled to use 3% of those funds to fund their SBIR program.   In 2019, the overall SBIR/STTR spending was approximately $3.28 billion for the SBIR program and $453 million for the STTR program.   The two biggest contributing agencies are the Department of Defense ($1.8 billion) and the Department of Health and Human Services ($1.15 billion).  Currently, eleven agencies participate in the program and the Small Business Administration serves as the coordinating agency.

The program’s goals are to:

  • Stimulate technological innovation.
  • Meet Federal research and development needs.
  • Foster and encourage participation in innovation and entrepreneurship by women and socially or economically disadvantaged persons.
  • Increase private-sector commercialization of innovations derived from Federal research and development funding.

In addition, the STTR program aims to:

  • Foster technology transfer through cooperative R&D between small businesses and research institutions.

The SBIR/STTR program consists of three phases.

Phase I. The objective of Phase I is to establish the technical merit, feasibility, and commercial potential of the proposed R/R&D efforts and to determine the quality of performance of the small business awardee organization prior to providing further Federal support in Phase II. SBIR/STTR Phase I awards are generally $50,000 – $250,000 for 6 months (SBIR) or 1 year (STTR).

Phase II. The objective of Phase II is to continue the R/R&D efforts initiated in Phase I. Funding is based on the results achieved in Phase I and the scientific and technical merit and commercial potential of the project proposed in Phase II. Typically, only Phase I awardees are eligible for a Phase II award. SBIR/STTR Phase II awards are generally $750,000 for 2 years.

Phase III. The objective of Phase III, where appropriate, is for the small business to pursue commercialization objectives resulting from the Phase I/II R/R&D activities. The SBIR/STTR programs do not fund Phase III. At some Federal agencies, Phase III may involve follow-on non-SBIR/STTR funded R&D or production contracts for products, processes, or services intended for use by the U.S. Government.

Ultimately, agency preferences, requirements, and 15 U.S.C § 638– shape the phase award amounts and how they will be distributed.  SBIR opportunities can be found on the SBA website and websites of participating agencies such dodsbirsttr.mil.

 

References:

Small Business Administration SBIR Overview, March 2020.

DARPA SBIR/STTR Contracting Questions

 

Table of Contents

Focus Areas

Bid Protest

REAs, Claims, Appeals

Socio-economic Policies

Compliance

SBIR / STTR

Other Transaction Authority

Teaming and Joint Ventures