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The Small Business Administration’s Small Business Innovation Research (SBIR) program is three-phase financial award program designed to foster technological innovation by small businesses. The program gives qualified small businesses opportunities to explore their technological potential, propose innovative ideas that meet specific research and development needs of the federal government, and incentives to profit from commercialization of the technology.
Most innovation and innovators thrive in the entrepreneurial sector but the risk and expense of conducting research and development efforts are often prohibitive for many small businesses. The government reserves a specific percentage of Federal research and development funds for small business. These funds enable small business to compete on the same level as larger businesses. SBIR funds startup and development and encourages commercialization of the product, technology, or service, which stimulates the U.S. economy.
Phase I evaluates the technical and scientific merit of an idea. Your business must be a Phase I awardee to be considered for a Phase II project. Awards can be made up to $100,000 for approximately a six-month effort.
Phase II expands the results and further development of Phase I. Awards for Phase II are for $750,000 or less and have a duration which typically does not exceed two years. Phase III is for the commercialization of Phase II results and requires the use of non-SBIR Federal or private sector funding.
So how can your business qualify? Under the SBIR program, your small business must be a for-profit American-owned and independently operated business. The principal researcher must be employed by the business. The government restricts company size to 500 employees or less. Nonprofit organizations are not eligible.
The government, each year, requires ten federal departments and agencies to reserve a portion of their research and development funds for SBIR award to small businesses. These departments and agencies designate research and development topics and accept proposals. They include:
• Department of Agriculture
• Department of Commerce
• Department of Defense
• Department of Education
• Department of Energy
• Department of Health and Human Services (including the National Institutes of Health)
• Department of Transportation
• Environmental Protection Agency
• National Aeronautics and Space Administration
• National Science Foundation
• Nuclear Regulatory Commission
The SBA coordinates the SBIR program, reviews the departments and agencies progress, and reports SBIR’s operations annually to Congress. The federal agencies participating in SBIR select SBIR topics, release SBIR solicitations evaluating SBIR proposals, and award SBIR funding agreements. The SBA collects and publishes solicitation information from all participating agencies quarterly in a Pre-Solicitation Announcement (PSA).
For tips on writing your SBIR proposal, click here.
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