The federal Small Business Innovative Research program, commonly referred to as the SBIR program, is a valuble mechanism for small businesses to fund innovative development programs. Eleven different federal agencies participate in the SBIR program, providing over $2 billion in awards. These agencies include:

• Department of Agriculture

• Department of Commerce

• Department of Defense

• Department of Education

• Department of Energy

• Department of Health and Human Services

• Department of Homeland Security

• Department of Transportation

• Environmental Protection Agency

• National Aeronautics and Space Administration

• National Science Foundation

Each of these agencies is required to set aside a portion of their budget for SBIR awards. The SBIR proposal and award process is performed by the specific agency, rather than through a central clearinghouse.

The basic requirements for small business eligibility are:

• The small business must be American-owned and operated

• The Principal Investigator must be an employee of the small business.

• The small business must be a for-profit company

• The small business must not have more than 500 employees.

Since each agency administers their SBIR programs in different ways, it is important to refer to the solicitation for each agency for all specific requirements. The programs for each agency vary by maximum budget, maximum time frame for completion, proposal requirements and submission mechanisms.

SBIR programs can have up to three phases of work:

• Phase I programs generally have a budget up to $100,000 and a time frame of 6 to 9 months. The goal of Phase I programs is initial R&D, and does not focus on production and/or commercialization.

• Phase II programs may be awarded to businesses who successfully complete a Phase I program. The Phase II program is more in-depth, with a budget generally between $500,000 and $750,000 over a period up to 2 years. The Phase II program expands on the proof-of-concept work performed in Phase I, and usually results in a fully functional prototype that is ready to be transitioned to commercialization. A portion of the Phase II program is dedicated to developing a commercialization channel for the potential product.

• Phase III programs are not funded by the government, but rather through industry partnerships to move the product to commercialization.

References:

Description of the SBIR Program – Small Business Administration web site - http://www.sba.gov/aboutsba/sbaprograms/sbir/sbirstir/sbir_sbir_description.html