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FAR Based Strategies

Ordering under the Federal Supply Schedule
Acquisition of Commercial Products and Commercial Services
Simplified Procedures for Noncommercial Acquisitions
Contracting by Negotiation
Indefinite-Delivery Contracts
Letter Contracts
Agreements
Small Business
Broad Agency Announcement
Commercial Solutions Opening

Statutory Strategies

SBIR/STTR Programs
Other Transactions
Procurement for Experiments
R&D Agreements
Cooperative R&D Agreement
Partnership Intermediary Agreement
Technology Investment Agreement
Contract Type Matrix

Small Business Innovation Research and Small Business Technology Transfer Programs
15 USC §638

The Small Business Innovation Research (SBIR) program is a competitive program that encourages small businesses to engage in Federal research and research and development with the potential for commercialization. The Small Business Technology Transfer (STTR) program facilitates cooperative research and development between small business concerns and nonprofit U.S. research institutions to support commercialization of innovative technological solutions. The SBIR and STTR programs are governed by 15 U.S.C. § 638 and the SBA SBIR/STTR Policy Directive. The SBIR program applies to Federal agencies with extramural R/R&D budgets exceeding $100 million; agencies must spend at least the minimum statutory percentage of that budget on SBIR awards.

SBIR/STTR generally follow a three-phase structure and may result in contracts, grants, cooperative agreements, or other authorized agreements depending on the agency’s authority and the purpose of the effort.

  • Phase I — Concept Development
    Phase I explores the technical merit, feasibility, and commercial potential of an idea or technology. Phase I proposals are evaluated competitively based on scientific and technical merit, feasibility, and commercialization potential. The period of performance normally should not exceed 6 months for SBIR or 1 year for STTR, although agencies may provide a longer period when appropriate.
  • Phase II — Prototype Development
    Phase II continues the research and development effort from Phase I and evaluates commercialization potential. Phase II funding is generally based on the results of Phase I and the scientific and technical merit, feasibility, and commercial potential of the Phase II proposal. The period of performance normally should not exceed 2 years, although agencies may provide a longer period when appropriate.
  • Phase III — Commercialization
    Phase III refers to work that derives from, extends, or completes work performed under a prior SBIR/STTR funding agreement and is funded by sources other than the SBIR/STTR program. Phase III work may include products, production, services, research and development, testing and evaluation, or any combination of these. There is no limit on the number, duration, type, or dollar value of Phase III awards, and the competition conducted for Phase I or Phase II satisfies competition requirements for a related Phase III award.

SBIR/STTR solicitations and awards may use BAA or CSO-style procedures when appropriate. Under the RFO, Broad Agency Announcements are now addressed at FAR 35.102, not FAR 35.016. Defense Commercial Solutions Openings are addressed at DFARS Subpart 212.70 and implement 10 U.S.C. § 3458 for innovative commercial products and commercial services.

For DoD, Class Deviation 2022-O0005, Revision 2, Pilot Program for Streamlining Awards for Innovative Technology Projects, expanded exceptions to certified cost or pricing data requirements for certain contracts, subcontracts, or modifications valued at less than $7.5 million and awarded to a small business concern or nontraditional defense contractor under a technical, merit-based selection procedure, the SBIR Program, or the STTR Program. The deviation should be checked for current applicability before use because it has been revised over time.

Non-FAR Based Application

Although agencies commonly use procurement contracts, grants, or cooperative agreements for SBIR/STTR awards, other transaction agreements may be available when the agency has independent OT authority and the selected phase and strategy support that approach. For DoD, prototype OT authority under 10 U.S.C. § 4022 may be relevant when the effort qualifies as a prototype project and the statutory requirements for using that authority are met.

Common Applications for SBIR Phase I and II

  • Research and development studies
  • Feasibility studies
  • Prototypes
  • Science and technology efforts
  • Technology maturation

Common Applications for SBIR Phase III

  • Commercialization of SBIR/STTR-developed technology
  • Products, production, services, or R&D that derive from, extend, or complete prior SBIR/STTR work
  • IT software and products
  • Prototypes and test/evaluation efforts
  • Technology maturation and transition activities

 

Pros

Cons
Phase III may be awarded without a new competition when the work derives from, extends, or completes prior SBIR/STTR work. SBIR/STTR data rights can limit the Government’s ability to disclose or use properly marked SBIR/STTR data outside the Government during the protection period.
SBIR/STTR can help agencies access innovative small businesses and transition promising technology. Technology transition into a program of record may require careful planning, funding alignment, and integration support.
Phase III provides a flexible pathway for commercialization, production, services, or additional R&D. Agencies must correctly identify and preserve SBIR/STTR status and data rights across all phases, including Phase III.
Award instruments may include contracts, grants, cooperative agreements, or other authorized agreements. Misunderstanding Phase III eligibility or data rights can create acquisition, IP, and protest risk.

Restrictions

  • Phase I and Phase II awards must follow SBIR/STTR eligibility, performance-of-work, and solicitation requirements.
  • Phase III work must derive from, extend, or complete prior SBIR/STTR work and must be funded by sources other than the SBIR/STTR program.
  • SBIR/STTR data rights apply to Phase I, Phase II, and federally funded Phase III awards.
  • Properly marked SBIR/STTR data is protected during the SBIR/STTR protection period, which generally lasts 20 years from the date of the applicable SBIR/STTR funding agreement unless a longer period is provided by the agency or otherwise negotiated.
  • Agencies should verify current SBA, DoD, and agency-specific SBIR/STTR guidance before relying on award thresholds, phase limits, or special pilots.

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