The Small Business Innovation Research (SBIR) program is a United States Government program, coordinated by the Small Business Administration, and currently authorized through September 30, 2022, in which all federal agencies with extramural research budgets in excess of $100 million have a percentage reserved for contracts or grants to small businesses.
Annually, the DoD SBIR budget represents more than $1 billion in research funds. Over half the awards are to firms with fewer than 25 people and a third to firms of fewer than 10. A fifth are minority or women-owned businesses. Historically, a quarter of the companies are first-time winners.
Congress established the Small Business Technology Transfer (STTR) Program in 1992. It is similar in structure to SBIR and funds cooperative research and development projects with small businesses in partnership with not-for profit research institutions (such as universities) to move research to the marketplace. This program is also authorized through September 30, 2022, for all federal agencies with extramural research budgets in excess of $1 billion.
The SBIR/STTR Programs are structured in three phases. Phase I (project feasibility) determines the scientific, technical and commercial merit and feasibility of the ideas submitted. Phase II (project development to prototype) is the major research and development effort, funding the prototyping and demonstration of the most promising Phase I projects. Phase III (commercialization) is the ultimate goal of each SBIR/STTR effort. Phase III work must be funded by sources outside the SBIR/STTR Program.
SBIR/STTR goals are designed to:
Stimulate technological innovation in private sector
Use small business to meet federal research and development needs
Encourage participation by socio-economically disadvantaged firms
Fund cooperative R&D between small businesses and research institutions
Bridge the funding gap between basic research and the commercial marketplace
Who is Eligible?
Small businesses with 500 or fewer employees
Independently owned and operated for profit
Have its principal place of business in the U.S.
Be at least 51 percent owned by U.S. citizens or lawfully admitted permanent resident aliens
The primary employment of the principal investigator must be with the small business
A minimum of 2/3s of the research work must be performed by the proposing firm in Phase I and 1/2 in Phase II
Small businesses with 500 or fewer employees; there is no size limit on the research institution
Partnership with a U.S. research institution
40 percent of work performed by small business
30 percent of work performed by research institution
Small business must manage and control the STTR funding agreement
Principal investigator may be employed at the small business or research institution
How Are Proposals Evaluated
Government scientists and engineers who are experts in a particular area review the proposals and evaluate them based on: Soundness, technical merit and innovation of approach
Qualifications of the principal investigators and supporting staff
Potential for government or private sector application
Participating Defense Agencies
Department of Army (ARMY)
Department of Navy (NAVY)
Department of Air Force (Air Force)
Missile Defense Agency (MDA)
Defense Advanced Research Projects Agency (DARPA)
Defense Threat Reduction Agency (DTRA)
Defense Health Program (DHP)
Special Operations Command (SOCOM)
Chemical and Biological Defense (CBD)
Defense Logistics Agency (DLA)
Defense Microelectronics Agency (DMEA)
National Geospatial Intelligence Agency (NGA)