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SBIR/STTR
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Contract Type Matrix

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

Small Business Innovation Research (SBIR) is a competitive program that encourages small businesses to engage in Federal Research and Development (R&D) with the potential for commercialization to stimulate innovation.

Small Business Technology Transfer (STTR) is a program to facilitate cooperative R&D between small business concerns and non-profit U.S. research institutions with the potential for commercialization of innovative technological solutions.

Federal agencies with R&D budgets exceeding $100 million are required to allocate a percentage of their R&D budget to these programs. Participating agencies determine relevant R&D topics for their programs.

SBIR/STTR are gated process with three (3) phases executed through BAA or CSO processes resulting in contracts, grants, or agreements:

  • Phase I Concept Development: Explore technical merit and feasibility of an idea or technology and determine the quality of performance of the small business prior to providing further Federal support in Phase II. Contracts are no more than 6 months in duration and are funded by the SBIR/STTR program. Typically, Phase I awards are typically less than $150,000.
  • Phase II Prototype Development: Continue R&D efforts initiated in Phase I and evaluate commercialization potential. Contracts are no more than 24 months, are funded by the SBIR/STTR program, and typically are less than $1 million. Award amounts are based on Phase I results and scientific and technical merit for commercialization.
  • Phase III Commercialization: Work that derives from, extends, or completes R&D efforts under prior SBIR/STTR Phase I/II and enables a small business to pursue commercialization. Phase III work may be for products (including test and evaluation), production contracts, and/or R&D activities. There is no limit on the number, duration, type, or dollar value of Phase III award. Phase III awards cannot be funded by the SBIR program. Agencies may enter into a Phase III SBIR contracts, grants, or agreements at any time (competitively or non-competitively) with a Phase I or Phase II awardee.

Class Devision 2022-O0005 Pilot Program for Streamlining Awards for Innovative Technology Projects expands the exceptions to certified cost or pricing data requirements at FAR 15.403-1(b) to include contracts, subcontracts, or modifications of contracts or subcontracts valued at less than $7.5 million awarded to a small business concern or nontraditional defense contractor pursuant to:

  • A technical, merit-based selection procedure, such as a broad agency announcement (see FAR 35.016(b)(2));
  • The Small Business Innovation Research (SBIR) Program or
  • The Small Business Technology Transfer (STTR) Program

In addition, contracts, subcontracts, and modifications of contracts or subcontracts valued at less than $7.5 million awarded to a small business concern or non-traditional defense contractor pursuant to a technical, merit-based selection procedure or the SBIR Program are exempt from the requirements for audit and records examination under the clause at FAR 52.215-2, Audit and Records—Negotiations. This exemption is not extended to covered contracts, subcontracts, or modifications under the STTR Program.

Non-FAR Based Application

Although agencies primarily use procurement contracts, grants, or agreements in the SBIR program, the use of Other Transactions (OTs) as award instruments is authorized. Section 863-864 of the FY18 NDAA includes express authority to allow for the award of Prototype OTs in the SBIR program.

Common Applications for SBIR Phase I and II

  • Research & Development (R&D) studies
  • Prototypes
  • Science & Technology (S&T) efforts
  • Technology maturation

Common Applications for SBIR Phase III

  • Solutions and technologies
  • IT software and products
  • R&D studies
  • Prototypes
  • S&T efforts
  • Technology maturation

 

Pros

Cons
Ability to award sole source to SBIR Phase I/Phase II vendors for Phase III work reduces procurement lead time SBIR/STTR data rights protection limits Government’s IP strategy
Phase III SBIR award procedures provide opportunity for acquisition programs to deliver capability quickly Technology insertion/transition process into program of record increases risk of project failure
Ability to uniquely negotiate terms and conditions, and pricing arrangements enables improved mission outcomes

Restrictions

  • SBIR/STTR data rights protection: Apply to all phases and restricts the Government from disclosing SBIR data outside the Government. Government cannot compete technologies containing SBIR data.

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