SMALL BUSINESS INNOVATION RESEARCH (SBIR)

The Small Business Innovation Research (SBIR) program provides support for research and development (R&D) of new or improved technologies and methodologies which have the potential to succeed as commercial products and to encourage participation in the program by socially and economically disadvantaged persons and women-owned small businesses. The SBIR program was established by the Small Business Research and Development Enhancement Act of 1992.

Federal legislation requires the Public Health Service (PHS), Department of Health and Human Services, and certain other federal agencies to reserve 2.5 percent of their extramural research or R&D budgets for an SBIR program.

The offeror organization must be a small business concern, and the primary employment of the principal investigator MUST be with the small business concern at the time of award and during the conduct of the proposed project. In accord with the intent of the SBIR program to increase private sector commercialization of innovations derived from federal R&D, scientists at research institutions can play an important role in an SBIR project by serving as consultants and/or subcontractors to the small business concern. Normally, one-third of the Phase I budget may be spent on consultant and/or subcontractual costs, and one-half of the Phase II budget may be spent on such costs. In this manner, a small business concern with limited expertise and/or research facilities may benefit from teaming with a scientist(s) at a research institution; for the scientist(s) at a research institution, this team effort provides support for R&D not otherwise obtained.

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The SBIR program consists of the following three phases

PHASE I: The objective of this phase is to determine the scientific and technical merit and feasibility and potential for commercialization of the proposed research or R&D efforts and the quality of performance of the small business concern, before consideration of further federal support in Phase II. Generally, Phase I SBIR awards do not exceed $100,000 for direct costs, indirect costs, and negotiated fixed fee for a period generally not to exceed six months.

PHASE II: The objective of this phase is to continue the research or R&D efforts initiated in Phase I. Funding shall be based on the results of Phase I and the scientific and technical merit and commercial potential of the Phase II proposal. Only Phase I contractors are eligible to apply for Phase II funding, and Phase II proposals may be submitted upon the request of the Contracting Officer ONLY. (However, see Fast-Track Initiative below.) Generally, Phase II awards do not exceed $750,000 for direct costs, indirect costs, and negotiated fixed fee for a period normally not to exceed two years. That is, generally, a two-year Phase II project may not cost more than $750,000 for that project. Only one Phase II award may be made for any SBIR project.

PHASE III: The objective of this phase, where appropriate, is for the small business concern to pursue, with non-SBIR funds, the commercialization of the results of the research or R&D funded in Phases I and II.

Fast-Track Initiative

(Applicable only to proposals submitted to National Institutes of Health [NIH] and only if an awarding component indicates it is accepting Fast Track proposals for a particular topic.)

The "Fast-Track" initiative is a parallel review option available to those small business concerns (offeror organizations) whose proposals satisfy additional criteria which enhance the probability of the project's commercial success. The Fast-Track initiative offers two major advantages:

1. an opportunity for small business concerns to submit both a Phase I and Phase II proposal for concurrent review. The Phase I proposal must specify clear, measurable goals (milestones) that should be achieved prior to initiating Phase II. Failure to provide clear, measurable goals may be sufficient reason for the peer review committee to exclude the Phase II proposal from Fast-Track review, retaining it for Phase I consideration only. The peer review committee will evaluate the goals and may suggest other milestones that should be achieved prior to the Phase II award. The Phase I and Phase II proposals will be scored individually and the scores for both phases totaled. Following the initial peer review, Fast-Track proposals may receive secondary review by the program staff of the respective awarding component.



2. the potential to minimize any funding gap between Phase I and Phase II. Proposals must be prepared in accordance with Phase I and Phase II preparation instructions. Fast-Track Phase II proposals may be funded following submission of the Phase I progress report and other documents necessary for continuation. Phase II proposals will be selected for award based on the project's scientific and technical merit of the proposed Phase II research; the awarding component's assessment of the Phase I progress report and determination that the Phase I objectives were met and feasibility demonstrated; the potential of the proposed research for technological innovation; and the availability of funds.

The Phase II proposal must be accompanied by a commitment(s) for funds and/or resources for commercialization of the product(s) or service(s) resulting from the SBIR award. Although a specific level of commitment is not specified, funds or resources matching or greater than the Phase II award are encouraged. Any commitment(s) from an investor or partner organization must be described in a letter of agreement or contract signed by an official of the investor or partner organization with the authority to legally bind the organization. Details of the commitment(s) must be included in a commitment appendix to the Phase II proposal.

The commitment appendix must specify the amount of funds and/or the nature of resources that will be dedicated to activities directly related to the SBIR project and must describe those activities. Non-federal commitments may support additional R&D on the project or activities that are beyond the scope of federal SBIR funding, such as market research. The activities supported by the commitment(s) should begin in Phase II and provide for a smooth transition into Phase III commercialization.

Because of the risk involved, the commitment(s) may be contingent upon the small business concern receiving the Phase II award, achieving technical objectives, and the technology continuing to be scientifically and economically viable in the marketplace. Details of commitment contingencies must be described in the appendix. Withdrawal of the commitment(s) may be considered sufficient commitment reason by the participating awarding component to remove the Phase II proposal from consideration under Fast-Track or withhold further Phase II support.

The small business concern must submit a concise Product Development Plan as a product development plan appendix to the Phase II proposal addressing each of the following areas:

• Company information, including size, specialization area(s), products with significant sales, and history of previous federal and non-federal funding, regulatory experience, and subsequent commercialization.



• Value of SBIR project, including lay description of key technology objectives, current competition, and advantages to competing products or services.



• Commercialization plans, milestones, target dates, market analyses of market size, and estimated market share after first year sales and after five years.



• Patent status or other protection of project intellectual property.

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Inquiries

Eligibility requirements, definitions, submission procedures, review considerations, contract proposal forms and instructions, and other pertinent information, including the Fast-Track Initiative in the PHS Solicitation booklet or at the NIH home page at
http://grants.nih.gov/grants/funding/sbir.htm#sbir.

Deadlines

The grant application receipt dates are usually April 1st, August 1st, and December 1st (same dates each year).

Performance of Research and Analytical Work by the Applicant Organization

In Phase I, normally, a minimum of two-thirds or 67% of the research or analytical effort must be carried out by the small business concern. Consultant fees and contracts to third parties for portions of the scientific/technical effort generally may not exceed 33% of the total budget, including direct and indirect costs.

In Phase II, normally, a minimum of one-half or 50% of the research or analytical effort must be carried out by the small business concern. Consultant fees and contracts to third parties for portions of the scientific/technical effort generally may not exceed 50% of the total budget, including direct and indirect costs.

The research and analytical work performed by the grantee organization is to be conducted in research space occupied by, available to, and under the control of the SBIR grantee for the conduct of its portion of the proposed project. However, when required by the project activity, access to special facilities or equipment in another organization is permitted, as in the cases where the SBIR awardee has entered into a subcontractual arrangement with another institution for a specific, limited portion of the research project.

REMEMBER – UCSF IS NOT THE RECIPIENT OF THE SBIR GRANT AWARD. WE ARE A SUBCONTRACTOR PARTICIPATING IN THE SCIENTIC RESEARCH OF THE LARGER PROJECT.