FREQUENTLY ASKED QUESTIONS 

(FAQs)

Table of Contents

  1. What is the SBIR Program?
  2. Why is there a Phase I Option?
  3. Can I submit a Phase I proposal with a base effort over 70K?
  4. Does one have to be a Phase I awardee  in order to be considered for Phase II of a project?
  5. What is the Small Business size standard for purposes of the SBIR Program?
  6. Are foreign-based firms eligible for SBIR awards?
  7. Are non-profit concerns eligible for SBIR Awards?
  8. May a portion of an SBIR award be subcontracted?
  9. Can a Federal Agency or individual be a subcontractor or consultant on a SBIR contract?
  10. What is the difference between SBIR solicitations and the SBIR Pre-Solicitation Announcement?
  11. Who can submit a proposal under the Navy SBIR Program?
  12. What must a Small Company do to get started in SBIR and STTR?
  13. How will payments be processed under the SBIR Contract?
  14. What is a Phase III?

What is the SBIR Program ?

  1. The Small Business Innovation Research (SBIR) Program is a highly competitive three-phase award system which provides qualified small business concerns with opportunities to propose innovative ideas that meet the specific research and development needs of the Federal Government. The Phase I is typically a study phase to evaluate the scientific merit of the idea and or perform small scale testing. The Phase II is typically a demonstration phase in which prototypes are built and tested. The Phase II usually lasts two years and in the Navy has a base award of $600,000 with a $150,000 option. The Phase III is for production units or additional R&D for a DoD Program. It can be for any amount of money and time period, but can not use SBIR dollars.
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Why is there a Phase I Option?

  1. Department of Navy awards for phase I base are for periods typically up to six months with a base amount not to exceed $70,000 and the phase I option not to exceed $30,000 for up to three months. The option will typically only be awarded if the company is selected for a phase II award. The option is used to provide the contractor with bridge funding between the end of the Phase I and start of the Phase II. It will not bridge the entire gap, but will reduce the time the company is with out funding while waiting for the Phase II award. It is very important to include the option funding in your original proposal so that it can be awarded as part of the phase I contract. If it is not, your company will not receive the $30,000 in phase I option funding.
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Can I submit a Phase I effort with a base effort over 70K? What is the effort level for Phase I Option?

  1. No, the Navy will reject proposals with a base effort over 70K. Phase I Option will not exceed 30K.
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Does one have to be a Phase I awardee to be considered for a Phase II of a project?

  1. Yes, Only those selected for Phase I for a project will be invited to submit a Phase II proposal for that same project..
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What is the small business size standard for purposes of the SBIR Program?

  1. A small business concern for purposes of award of any funding agreement under the SBIR Program is one which, including its affiliates, has a number of employees not exceeding 500.

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Are foreign-based firms eligible for SBIR awards?

  1. No. To be eligible for award of SBIR funding agreements, a small business concern has to meet the following qualifications:

    • be independently owned and operated
    • principal place of business is located in the United States
    • at least 51 percent owned or in the case of a publicly owned business, at least 51% of its voting stock is owned by United States citizens or lawfully admitted permanent resident aliens.
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Are non-profit concerns eligible for SBIR Awards?

  1. No, but they can be subcontractors to a small business.

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May a portion of an SBIR award be subcontracted?

  1.  For Phase I, a minimum of two thirds of the research and/or analytical effort must be performed by the proposing firm, and for Phase II, a minimum of one-half of the research and/or analytical effort must be performed by the proposing firm.

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Can a Federal Agency or individual be a subcontractor or consultant on a SBIR contract?

  1. No. The SBIR program was set up to provide money to small business not back to the Government. If work needs to be provided by a government employee it will be provided under a separate vehicle and with non-SBIR dollars.

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What is the difference between SBIR solicitations and the SBIR Pre-Solicitation Announcement?

  1. During the Pre-Solicitation phase the companies can review the topics that most likely will be included in the solicitation and call up the topic authors to further discuss the topic with them. Once the solicitation opens, there can be no direct conversations with the topic authors.

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Who can submit a proposal under the Navy SBIR Program?

  1. At the time of Phase I, Phase II, and Phase III contract awards, any business concern that meets the following criteria:

    • Is independently-owned and operated.
    • Is not dominant in the field of operation in which it is proposing.
    • Has its principal place of business located in the United States.
    • Is organized for profit.
    • Is at least 51% owned, or in the case of a publicly-owned business, at least 51% of its voting stock is owned by United States citizens or lawfully admitted permanent resident aliens.
    • Including its affiliates, has a number of employees amounting to 500 or less.

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What must a Small Company do to get started in SBIR and STTR?

  1. First, obtain the current solicitation --

    Solicitations and the solicitation schedules are available at www.acq.osd.mil/sadbu/sbir/solicitations

    The SBIR and STTR solicitations list all the research topics under which DoD is seeking phase I proposals, and also contain detailed information on the parameters of the SBIR and STTR programs and how to submit a proposal. DoD issues three SBIR solicitations and one STTR solicitation each year.

    Second, to resolve any questions you may have--

    If you have a general question about the SBIR or STTR programs, please contact the Navy SBIR program office at (703) 696-0342 or try the DOD SBIR/STTR Help Desk at (866) 724-7457 (866-SBIRHLP), or send an e-mail to sbirhelp@navysbir.com. We have also prepared a set of answers to commonly-asked questions about proposal preparation, contracting with the government, and getting paid in a timely manner.

     

    If you have a technical question about a specific research topic listed in the solicitation, you may ask it in two ways:

    ·     Talk by telephone with the topic author, whose name and phone number is listed in the solicitation. You may only talk with a topic author during the pre-release stage of the solicitation.  

    ·     Submit a written question through the SBIR/STTR Interactive Topic Information System (SITIS), in which the questioner and respondent remain anonymous and all questions and answers are posted electronically for general viewing until the solicitation closes.

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How will payments be processed under the SBIR Contract?

  1. If the contract is Fixed-Price, the clause at FAR 52.232-2 will be included in the contract. This clause provides that contractors should be paid promptly as portions of work are completed. In order to provide for payment for a portion of the work, that portion of the work and price must be separately stated in the contract. If this is not done, the contractor will not be able to receive payment for portions of the work. The only other method of receiving interim payments on a fixed-price contract would be through progress payments, which can be authorized by the clause at FAR 52.232-16. Progress payment procedures are more complicated than partial payments and the contractor must have an approved accounting system if the progress payments clause is included in the contract.

    a.      If a fixed-price contract is incrementally funded, the clause at DFARS 252.232-7007 Limitation of Government’s Obligation will be included in the contract. This clause requires the contractor to notify the contracting officer in writing at least ninety days prior to the date when, in the contractor’s best judgment, the work will reach the point at which the total amount payable by the Government, including any cost for termination for convenience, will approximate 85 percent of the total amount then allotted to the contract. The notification will state the estimated date when that point will be reached and an estimate of additional funding needed to continue performance. This clause also provides that if such additional funds are not to be allotted, the contracting officer will terminate any items for which additional funds have not been allotted. However, the contract may be modified, by mutual agreement of the parties, to change the funding schedule and, if necessary, the period of performance.  

    If the contract is Cost-Plus-Fixed-Fee,a Cost-Reimbursement type of contract, the clause at FAR 216-7 will be included in the contract. This clause allows for submission of vouchers approximately twice each month for actual costs incurred. The clause also allows a small business to voucher for recorded costs for items or services purchased directly for the contract, even though they have not yet paid for those items or services.

    a.      If a cost-reimbursement contract is incrementally funded, the clause at FAR 52.232-22 Limitation of Funds will be included in the contract. This clause requires the contractor to notify the contracting officer in writing when costs expected to be incurred within the next sixty (60) days (may be varied from 30 to 90 days) will exceed 75 percent (may be 75 to 85 percent) of the total amount allotted. This notice should state the estimated amount of the additional funds required to continue performance. This clause also provides that if additional funds are not to be allotted by the end of the period specified in the schedule or another agreed-upon date, upon the contractor’s written request, the contracting officer will terminate the contract.

    NOTE: If  the contract is incrementally funded (not fully funded at time of award) the contract will require the contractor to notify the contracting officer when additional funds will be required to continue performance.

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What is a Phase III?

  1. Phase III is any non-SBIR dollars that are provided to the company. The Phase III is the goal of most SBIR projects. It can be Government funds or private sector funding. The success of the Navy SBIR program is measured by companies transition their SBIR efforts into products, tools or services that benefit the Navy acquisition community. One important strength of the SBIR program is that once a company has received a Phase I award the follow-on Phase II and III awards can be awarded in a non competitive process since the competitive process took place under phase I.

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 MCSC SBIR Program Office.
Copyright © 2005  Technology Transition Office. All rights reserved.
Revised: 06/28/05.