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SBIR / STTR

Small Business Innovation Research / Small Business Technology Transfer

What is SBIR/STTR?

The federal Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs are sources of a combined $2.5 billion in early-stage research and development (R&D) seed capital set aside exclusively for small, tech-based U.S. companies. These programs offer grants or contracts to support serious R&D and subsequent commercialization of technologies valued both by the business applicant and the federal government. 

Profile of a Good Candidate


Quick Learn™ SBIR Fact Sheet and Profile of a Good Candidate

A short handout highlighting the SBIR program and describes characteristics of a good SBIR candidate. Highlighted are qalifications and attributes necessary for a candidate to succeed in the SBIR/STTR programs.

 

 

 

STTR

STTR expands funding opportunities in the federal innovation R&D arena. Central to the program is expansion of the public/private sector partnership to include the joint venture opportunities for small businesses and nonprofit research institutions. The unique feature of the STTR program is the requirement for the small business to formally collaborate with a research institution in Phase I and Phase II. STTR's most important role is to bridge the gap between performance of basic science and commercialization of resulting innovations.

Qualifications for SBIR

In order to be eligible to participate in SBIR businesses must meet the following qualifications:

  • Organized for profit, with a place of business located in the U.S.;
  • At least 51% owned and controlled by one or more individuals who are citizens of, or permanent resident aliens in, the U.S., or
  • 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; and;
  • 500 or less employees, including affiliates (exceptions may apply).

The SBIR programs are designed to fund the development of truly innovative technologies. These technologies often represent advancements in the state-of-the-art in their field, but some agencies will also fund significant improvements of existing technology and/or innovative applications of existing technology.

Use of the Funds

SBIR funding is unique in that it does not have to be matched, nor does it ever have to be repaid by the small business. The award monies can be used to fund most costs directly associated with the R&D project – e.g., salaries/wages, benefits, supplies and materials, and in some cases, equipment. The money can also be used to pay a share of the awardee’s overhead and administrative expenses and even pays the awardee company a profit of up to 7%.

Federal Agencies

The following government organizations participate in the federal SBIR program.  Each agency administers its own individual program within guidelines established by Congress. These agencies designate R&D topics in their solicitations and accept proposals from small businesses. Awards are made on a competitive basis after proposal evaluation.  Next to each entity is the acronym for which they are commonly known.  Not all entities participate in STTR.  Learn more about STTR at MTIP's webpage. 

United States Department of Agriculture (USDA)
Department of Commerce - National Institute of Standards and Technology (NIST)
Department of Commerce - National Oceanic and Atmospheric Administration (NOAA)
Department of Defense (DoD)
Department of Education (DoED)
Department of Energy (DOE)
Department of Health and Human Services (*DHHS)
Department of Homeland Security (DHS)
Department of Transportation (DOT)
Environmental Protection Agency (EPA)
National Aeronautics and Space Administration (NASA)
National Science Foundation  (NSF)

*DHHS includes opportunities from four main components including the National Institutes of Health (NIH), the Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA) and the Administration for Children and Families (ACF).

Because of the levels of funding available – more than $1 million in many cases – SBIR is a highly competitive program. To be successful in them, applicants must commit to learning how the programs operate and how to prepare and submit winning proposals. The Montana Technology Innovation Partnership (MTIP), a program within the Montana Department of Commerce, provides free, individualized assistance to Montana companies competing in the SBIR/STTR programs. MTIP has demonstrated repeatedly over many years that its involvement early and often throughout the proposal process can significantly improve its clients’ chances of developing winning proposals.

A Phased Program

SBIR is structured in three phases: 

Phase l - Feasibility

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 Phase I awards normally do not exceed $150,000 total costs for 6 months.

Phase ll - Prototype

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. Only Phase I awardees are eligible for a Phase II award. SBIR Phase II awards normally do not exceed $1,000,000 total costs for 2 years. 

Phase lll - Commercialization

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 program does not fund Phase III. Some Federal agencies, Phase III may involve follow-on non-SBIR funded R&D or production contracts for products, processes or services intended for use by the U.S. Government. 


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